I’ve been contacted by Ovintiv seeking to trade its undeveloped leasehold - lease signed in 2015 - to Flywheel. We have an addendum requiring the lessor to sign the lessee’s consent to assign this lease. I’m pretty new to this and haven’t come across this issue yet - I assume this is common however are there any specifics I should look out for before consenting to this lease trade? Thanks & appreciate any input!
First, if the lease is dated 2015, then it would be past the primary term and and continuous drilling period. Is the lease producing? Did any acreage or depths expire under a Pugh clause? Or by undeveloped do you mean that there is unit and these will be fill-in wells? Second, be careful that the consent language is limited to the transaction and that you are not being asked to ratify that the lease has not expired.
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