Reference (my): Comment by Douglas D. Barron on July 25, 2014 at 11:02am...
My cousin and have a lease with Encana in Amite County, sections 15 and 31, Township 2 North, Range 4 East. Our current 3 yr lease (with an option for Encana to renew for 3 more years) expires at the end of December, 2014. ENCANA did not renew the lease they had with us. They've had no contact with us since the initial lease, other than my call to them. Since ours falls in the area described by Mr. Jimmie L Powell in his comment on Jan. 26, 2015 at 12:44 pm ( TS2N-R4E (sections 1 through 43, and we greatly appreciate that information!), we can only guess the current price of oil killed our deal... hopefully only temporarily. Did anyone else have a lease in that area? If so, was it renewed, OR did it get a well drilled? OR, does anyone have any knowledge of a well being drilled in any of the referenced areas in Mr. Powell's comments?
Thank you all again for the information this site provides!
In all likelihood, the decision to not renew your lease was made well before the drop in price. Most companies will begin the renewal process 2-3 months before expiration. In your case that would have been back in September or October. Leases are usually taken during the preliminary phase of geological evaluation and subsequent, more detailed evaluation causes the Company to drop them as non-prospective.
I'm not familiar with the area so I can't help you more specifically.
Good luck.
When I called them back in Aug. 2014, they told me I wasn't scheduled for drilling that year and most likely they'd schedule it in the following 6 months... I've googled ENCANA news T2N, R4E and learned they've approved 4 wells in Sec. 31, T2N, R4E on 11/19/2014 and our leases were in Sec. 15 NE/4 and 31, but unfortunately none carry the "indexing" designation of NE/4, SE/4 as does our Sec. 31 lease. Too bad, I reckon. Maybe next time... I appreciate your reply and the "Good Luck" too! Many thanks for taking the time and GOOD LUCK to us all!
Doug,
When we spoke yesterday It was my understanding that your original lease contained a 3-year primary duration with a 3-year option. Which means that the option is still in effect unless EnCana has decided not to in force it. In other word, you and Encana signed a lease for a total of 6 years with the option in play. I believe it still might be, they will send you a another bonus check if so. It is not necessary for them to contact you if they are excising the option. They will simply send a check to you sometime after the primary period expires and the option part of the lease goes into effect.
Let me tell you about a situation that my family and I experienced with a lease we had with an oil company several years ago. We signed a lease with an oil company specifying a 3-year primary phase with a 2-year option. At the end of the 3-year term we were not notified that the 2-year option would or would not be excised. They simply sent everyone a bonus check involved in the legal lease for the 2-year option with no additional communication from the company. They never drilled or attempted to drill a well on the property for the 5-year duration. Have your lease being in effect for 6 years, yet? Most or all initial leases goes away if during the leasing period drilling or oil production occurs.