Atlantic Resources activity - Reeves Co., TX, Blk 53, Sec. 36, PSL

Anyone know anything about the status of Atlantic Resources drilling in the referenced area. They permitted (and drilled) several wells in this area. One was permitted 05/2017 regarding our acreage but doesn’t appear to have had anything drilled. They also don’t have a lease with us to drill.

As a person that’s not privy to their drill schedule, my best guess would be before 5/2019 (permits are only valid for 2 years). I didn’t see any of their rigs nearby, but they could always move one in from another area or county. If they wanted to extend or re-file a new permit, it looks like their leases would be valid into 2020 - if they were 3 year terms. Even-though they didn’t lease with you, they may have the right to drill via an assignment/PSA/JOA from the various other lessees in there.

That makes sense about timing. I understand what you are saying about leasing but we have no other acreage out there and how not signed any leases with them. Wouldn’t that mean they would need to lease from us?

Not necessarily, if you leased with Felix Energy and they 1) assigned your lease to Atlantic, then it would essentially be like Atlantic leased you. They would own the rights your lease and therefore the right to drill upon the lands. 2) With a Production Sharing Agreement (PSA) or Joint Operating Agreement (JOA) the lessees come to an agreement on how to develop and operate the lands. Typically the company with the most ownership will drill and operate the lands.