Habendum Clause
The habendum clause is the section of an oil and gas lease that sets how long the lease lasts. It gives the operator a fixed number of years to begin drilling or establish production, and then may keep the lease alive for as long as qualifying production continues.
Without this clause, the lease would not clearly define when the operator's rights begin, end, or continue. With it, those rights are time-limited, and they end automatically if production does not follow.
Every oil and gas lease contains a habendum clause, even when it is not labelled that way. It is one of the most important clauses a mineral owner should understand before signing or reviewing a lease.
Owner-First View
The habendum clause is what gives your lease an expiry date. If the operator's fixed years have passed and there is no qualifying production or valid savings provision, the lease may have terminated, which could give you the right to lease again. Knowing how to read this clause tells you whether the operator's rights over your minerals are still valid today.
How the Habendum Clause Works
The habendum clause contains two back-to-back periods.
Primary Term
The primary term is a fixed window of time, commonly two, three, or five years in Texas, during which the operator has the right to explore and drill. The lease generally stays in force during this period whether or not drilling happens, as long as the lease terms are otherwise being followed. The lease bonus the operator paid you is essentially payment for this window of time.
If the primary term ends and there is no qualifying production or valid savings provision, the lease may terminate. The mineral owner is free to lease again to anyone.
Secondary Term
If a well begins producing before or during the primary term, the habendum clause automatically extends the lease into a secondary term. The standard language reads:
"...and as long thereafter as oil or gas is produced from said land."
This means the lease has no fixed calendar end date once the secondary term begins. It can continue as long as qualifying production continues or another valid lease provision keeps it in force. The moment production stops and is not saved by another lease provision, the lease terminates.
| Primary Term | Secondary Term | |
|---|---|---|
| When it applies | From lease signing to the end of the stated years | After the primary term ends, if production has begun |
| How long it lasts | Fixed — stated in the lease (e.g. 3 years) | Indefinite — runs as long as production continues |
| What ends it | Expiry date passes with no production | Production stops with no savings provision to extend it |
| What keeps it alive | Nothing required — the clock just runs | Qualifying production must continue, unless a valid savings provision allows a temporary gap |
A Real-World Scenario
Sarah owns mineral rights in Midland County, Texas. In 2019 she signed a three-year lease — primary term ending in 2022.
The operator drilled a well in 2021 and it began producing that same year. When 2022 arrived, the habendum clause automatically carried the lease into the secondary term because production was ongoing.
In late 2023, the operator shut the well in for an extended period. Sarah reviewed her lease and found no shut-in royalty clause that would protect the lease during a production stoppage. Under the habendum clause, if the well stayed shut in beyond what the lease allowed and no other savings provision applied, the lease may have terminated by its own terms, and Sarah may have regained the right to lease again.
What "Produced" Actually Means
The secondary term uses the word "produced", but that does not simply mean any trickle of oil or gas coming out of the ground. In Texas, courts apply the standard of production in paying quantities: the well must be producing enough to generate revenue that exceeds its operating costs over a reasonable period. A well that produces only minimal volumes at a sustained operating loss may not meet this standard and may not satisfy the habendum clause.
Two other lease provisions can affect whether the secondary term is considered met:
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Shut-in royalty clause
Allows a lease to stay in force during a temporary production stoppage if the operator pays the mineral owner a shut-in royalty. Without this clause, a shut-in well may not keep the lease alive during a production stoppage.
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Operations clause
May keep the lease alive if active drilling or completion operations are underway when the primary term ends, even before production has started.
These provisions appear in the lease document alongside the habendum clause and must be read together with it.
What to Check if the Habendum Clause May Be an Issue
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Calculate whether the primary term has expired.
Take the date the lease was signed and add the number of years stated in the habendum clause. If that date has passed, the lease must be supported by qualifying production or another valid savings provision to remain in force.
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Confirm the lease is currently producing.
Mineral View's Lease Report shows the current status of a claimed lease (Producing or Shut-In) alongside production data and operator information. A lease showing Shut-In status should be reviewed against the habendum clause and any shut-in royalty or savings provisions.
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Check for recent activity or filings on the lease.
If production status is unclear, monitoring what is actually happening on the property gives a clearer picture. Mineral View's Lease Activity tracks daily regulatory filings and activity signals, helping owners see what may be happening on a lease before waiting for a royalty statement.
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Review savings provisions in the lease.
Shut-in royalty clauses, operations clauses, and force majeure provisions may extend the lease beyond a strict reading of the habendum clause. These provisions are in the same document and must be read alongside it.
Common Questions
Yes. The physical presence of a well on the property does not, by itself, keep a lease alive. The habendum clause generally requires qualifying production. A well that is plugged, abandoned, or shut in without a valid savings provision may not keep the lease alive, even if equipment remains on the land.
Not directly. The habendum clause controls how long the lease is in force, not what royalty percentage the lease contains. However, if a lease may have terminated under the habendum clause and the mineral owner did not realize it, later production or payments may raise title questions worth reviewing with a qualified landman or oil and gas attorney.
