A top lease: a new lease that waits for the old one to end
A top lease is a lease you sign now that takes effect only if your current lease expires or ends. Companies offer them when they expect a lease to lapse, or want to be first in line if it does.
What it does
Your current lease stays in force until it ends on its own terms. A top lease does not end it, and the company holding the current lease may not agree that it has ended.
The bonus is often split: a small amount at signing and the rest only if the top lease takes effect. Read when each part is paid and what happens if the current lease never ends.
Before signing, it helps to know where the current lease stands: when its primary term ends, and whether production, shut-in payments or a pooled unit are holding it.
What we mark on a review sheet
Normal
- A clear trigger: the top lease starts only when the current lease ends.
- A time limit: if the current lease has not ended within a set period, the top lease lapses.
Missing
- Payment terms for the part of the bonus paid later.
- A limit on how long the top lease can wait.
Ask about
- A top lease with a lower royalty or weaker terms than your current lease.
- Language asking you to help end the current lease.
Questions to ask the company
- When is each part of the bonus paid, and what happens if the current lease never ends?
- How long can the top lease wait before it lapses?
- Will the royalty, Pugh, cost and surface terms be at least as good as my current lease?
Common questions
What is a top lease?
A lease signed while another lease is still in force, which takes effect only if the existing lease ends.
Does signing a top lease end my current lease?
No. The current lease stays in force until it ends on its own terms. The top lease only waits for that.
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.