All paperwork and other materials related to modifications of oil and gas leases can be found under Forms, Policies & Procedures. Oil and gas leases on University Lands are governed by the Board for Lease and UT System Board of Regents rules. Contact our Land Department group for further information.
If production has not been obtained at the expiration of the primary term of the lease but drilling operations are being conducted, the lessee may apply in writing for a 30 day lease extension. The application must be filed on or before the expiration of the primary term. Additional extensions of 30 days each may be granted up to an aggregate of 360 days. Payment for an extension must be received on or before the last day of the primary term or current extension. The extension fee is $20.00 for each acre in the lease for each 30-day extension period.
An oil and gas lease may be amended to include certain lease provisions in the form adopted by the Board for Lease of University Lands at the time the lease is amended. Written application is required. The Board for Lease of University Lands allows amendments of leases with a payment of $100 per lease.
More current versions of the UL oil and gas lease include a re-working provision. Without this provision, a cessation of production from the lease could result in its automatic termination. In order to preclude the risk of automatic termination of the lease in the event of a stoppage in production, and to provide certainty to the parties in the event of such a cessation, lease agreements without this provision can be amended to add the 60 day re-working clause, shut-in royalty provisions, and take-in-kind royalty rights. Any amendment of the lease would not affect royalty obligations or other fees and payments as set out in the existing lease.
UL leases may be extended and maintained by payment of shut-in royalty and the completion of a shut-in certificate. The number of shut-in periods available varies from lease to lease; refer to the lease agreement for specifics. The shut-in royalty fee as adopted by the Board for Lease of University Lands is $1,200.00 per lease. Payment of shut-in royalty after the expiration or other termination of the lease will not revive or extend the lease.
At least 45 days prior to commingling production, an operator must submit by mail to the Land Department a written request in letter form along with:
- Hard copy of the P-17
- Plat depicting production storage facility schematic
- Plat depicting the location of wells and leases to be commingled
A request for permission to add or delete a lease(s) to an existing approved commingle, the request may be made via email to ULCommingle@utsystem.edu. Please attach a copy of the P-17 and a plat showing the lease(s) to be added or deleted.
Applications and required documentation should be submitted to University Lands at least thirty (30) days before drilling is scheduled to begin. If this is not possible, contact the Land Department.
If the lessee establishes production on a lease within the primary term of that lease, then according to Article 8 of the UL oil & gas lease, the lessee is required to spud a second well within 120 days of the Primary Term expiration date, and additional wells every 120 days thereafter. Otherwise, all non-productive acreage will be severed from the Lease and returned to University Lands’ inventory.
On or before the date upon which Lessee is obligated to spud in a well under Article 8(b)(i), Lessee may remit a fee (the "Deferred Drilling Fee") in the amount of twenty dollars ($20.00) per acre for all acreage in the Premises except Productive Acreage. Timely payment of the deferred drilling fee entitles Lessee to extend the time period for spudding in a well under Article 8(b)(i) by thirty (30) days. Lessee may extend the time period for spudding in the well for two additional and successive periods of thirty days each by the payment of a like sum of money on or before the expiration of the then-current extended time period.
Reinjection of Gas
Royalty is paid on all gas produced and sold. Any operator planning to re-inject gas into a producing formation must obtain prior approval from University Lands.
An example of the required paperwork can be found in Forms. Provide a request letter, including the UL leases (with legal descriptions) involved, specifically which wells gas shall have re-injected, how the gas will be metered and a facility schematic showing how the product is routed, metered and distributed. Include sales line meter location in relation to the battery and how gas will be sent back to the wells.
When providing production reports to University Lands, any gas volume re-injected and volumes sold must be included.