I JUST GOT A AFFIDAVIT OF NO-PRODUCTION AND IT WAS SIGNED BY PROPERTY OWNER , I OWN THE MINERAL RIGHTS AND THIS IS THE FIRST TIME I HAVE SEEN THIS, WHAT INTREST WOULD THE PROPERTY OWNER HAVE IN SIGNING THIS
1017 FM 3496, Gainesville, Texas.
Dear Ms. Pollard,
An Affidavit of Non-Production is a obtained pursuant to a Title Requirement in an Original Title Opinion, which is issued prior to operations for the drilling of a well (generally speaking).
The title requirement generally reads “There are several Oil and Gas Leases that are not released of record. Please obtain releases of the Oil and Gas Leases or in the alternative obtain an Affidavit of Non-Production by a disinterested third party and also a Corroborating Affidavit.”
Buddy:
I just received a phone call from a landman who was hired by EOG Resources to prepare Affidavits of Non-Production pertaining to several of the landowners adjacent to my property in Karnes County (just south of the Karnes/Wilson County line next to HWY 123). Most of the questions centered around who might be related to one another. Most, if not all, of the leases in this area were executed with EOG around June 2009 at $350.00 per acre and were 3 years with an additional 3 years at EOG's option. To the best of my knowledge, EOG did opt for the additional 3 years. I read your response to Ms. Pollard stating that , generally speaking, the Affidavits are prepared prior to drilling of a well. However, I did read that it is used when a lease is going to be terminated. There has been no drilling in my pooling unit (Pruski) nor in the pooling unit adjacent to my property (Abbot). Is it possible that EOG is terminating the leases in my area. I thought we were in the"sweet spot" of the Eagle Ford play. Thanks in advance for any explanation you can provide.
Mark
Very rarely will a Lessee/Assign go to the trouble of filling out and filing for record an Affidavit of Non-Production "when a lease is going to be terminated," probably only when required to do so by the underlying Lease. More commonly, there will be a Release of Oil and Gas Lease. Normally, the Affidavit of Non-Production, as Buddy stated, is filed in the public record when a well is about to be drilled to make the lawyers happy.
As the surface owner, the guy who signed the Affidavit in your case is in the best position to know whether or not there is current production of your minerals, that's why he was approached. His potential interest, depending upon whether or not the actual lease allows for it, is that part of his surface might be used for a pad site to drill the well, for which he will be compensated handsomely.