Advice on monitoring/enforcing depth clause


#1

Because of the good advice I found on this website, I included a depth clause in my leases. But, now I’m wondering how it’s enforced. Will the oil companies note its existence and contact me if they propose to drill deeper or do I have to monitor future drilling permits? I hope my question makes sense. If not, let me know and I’ll try to clarify.


#2

Your question makes sense. It is likely someone will note the depth clause and contact you if a deeper prospect develops in the future. That said, it doesn’t mean you shouldn’t monitor future activity in your unit periodically.


#3

At the end of the primary term or continuous drilling period, ask the oil company to file a release of the deeper depths. This provides clear information to future lessees that your minerals are open to lease.


#4

Thanks. I will do that.


#5

Depending upon which company you are dealing with, they may check the leases. If they are going to drill deeper, the discovery phase for a title check for a new OCC hearing for the new well will usually pick up the lease terms relating to a new zone and you will be contacted to lease. In general, but not always, a company may drill the deepest reservoir first in order to hold all the leases and then move up the hole to drill shallower ones. Every once in a while, they may miss an old force pooling or lease and have to come back and lease again. Getting the release of lease for deeper zones is a nice way to make sure it is documented.


#6

Thanks Martha. I appreciate your taking the time to provide information/advice. The current well was drilled to the Woodford. I have no idea if going deeper is a possibility within my lifetime (I’m 67) - but even if it’s not, we’re planning to pass our minerals to our kids/grandkids so trying to protect what we have or at least let them know what we have tried to do.


#7

Always good to protect. I put depth clauses on all of mine as well.