Delay Rental Clause (US) | Practical Law

Delay Rental Clause (US) | Practical Law

Delay Rental Clause (US)

Delay Rental Clause (US)

Practical Law Glossary Item w-027-4726 (Approx. 2 pages)

Glossary

Delay Rental Clause (US)

A clause in an oil & gas lease that allows the lessee to pay an amount (delay rental) to the lessor to postpone commencement of drilling operations during the primary term of the lease to keep it in effect. Payment of the delay rental should be made on or before each anniversary date of the lease. Under Texas law, if the lessee fails to properly and timely make the delay rental payment, the lease terminates. However, most modern oil & gas leases are paid-up with no delay rental clause.