In Texas, what constitutes commencement of operations? In Louisiana, I think at least it used to be that if the primary term expires and a well had not actually spudded, the lease terminated automatically. Is it different in Texas? If they hire a surveyor to stake a well and draw a unit plat, even apply for a drilling permit, is that enough? Building a pad or road? Or just what allows the lessee to retain ownership of the lease? Is this cut and dry or a very gray area?
Most of the actions by lessee that you are describing would occur during the primary term. If that is the case, the premise of your question is moot. As far as what would keep the lease in effect beyond the end of the primary term, that would depend on the wording and provisions contained in the lease. In that respect, I wouldn't think that it is very gray. It would come down more to black on white.
I bought the property already leased. Like 99% of all leases I have seen, the lease does not specifically define what constitutes operations which will extend the primary term. That would require a special clause and this lease does not have one. Therefore, it's certainly not black and white. Hoping that someone knows Texas law.
Recently, the Lessee offered a new lease, with lease bonus, but now says Oops, we made a mistake, you are in a unit. But to my knowledge, all they did was get the survey plat and a drilling permit. There was no drilling rig on site at the end of the primary term.
If there is no clause or clauses that extend the primary term of the lease, the lease will expire at the end of the primary term.
It doesn't make any difference if there is no drilling rig on site. The land may be unitized with other lands, and the drilling rig may be located elsewhere.
Once again, a survey plat and a drilling permit would typically be an action by lessee that is performed in the primary term of the lease. The question doesn't really make sense in that regard.
It sounds like by having done additional research, the lessee believes that you are unitized. If that is the case, and they don't want to pay for a new lease, ask them about royalty payments.
You seem to be fishing for an answer that isn't there. Good luck to you.
Dave, we are not communicating, thanks anyway. This is not a unitization question.You could totally remove any reference to a unit from this thread and the question would remain.
There was no drilling rig ANYWHERE WITHIN THE DRILLING UNIT prior to the end of the primary term. A well had not been spud. Assume that all they did was get a survey done and get a drilling permit.