The assignment clause: who ends up holding your lease
An assignment clause lets the company transfer the lease, in whole or in part, to another company. Many leases are taken by a lease broker or field landman for someone else and assigned soon after signing.
What it does
Printed forms usually let the company assign freely. The same clause often says that changes on your side, such as a sale or an inheritance, do not bind the company until it receives the recorded papers.
Owners commonly ask for written notice of any assignment, with the new company's name and address, and for the new holder to take on every duty in the lease. Some ask that the first company stay responsible for anything that came due before the transfer.
What we mark on a review sheet
Normal
- Freedom to assign, with the new holder bound by every term of the lease.
- A rule that your own transfers bind the company once it has the recorded papers.
Missing
- Notice to you when the lease is assigned.
- Who answers for amounts that came due before an assignment.
Ask about
- A company name on the letter that differs from the lessee on the lease form.
- Language releasing the first company from everything the moment it assigns.
Questions to ask the company
- Who is the lessee on this lease, and do you expect to assign it?
- Will you send me written notice, with the new company's name and address, within a set number of days of any assignment?
- Will the new holder take on every obligation in the lease?
Common questions
Can an oil company transfer my lease to another company?
Usually, yes. Most leases let the lessee assign. You can ask for written notice and for the new holder to take on every term.
Why does the lease name a different company than the one that contacted me?
Leases are often taken by a broker or landman for another company, or assigned soon after signing. Ask who the lessee will be.
Send it before you sign
Tell us what you got and what you want to know. We reply by email and tell you how to send the pages. A landman reads them and sends back a one-page review sheet.
Email hello@landman.review with what you got and your question, or call (307) 263-8515.