Depth Limited Pooled Units (vertical wellbore)

General Mineral Rights Discussion
1

Is production from a depth limited pooled gas unit required to be produced from within the pooled depths

2

Dear Mr. McKellar,

I am not sure that I have ever run into this particular questions. If he pooled interval is from the surface to the base of the HACKBERRY, for example and there is no vertical severance by operation of pugh clause, then a deeper well, such as to the YEAGUA, would require either a new unit or it will treated as a lease well.

Great question.

3

Dear Mr. Cotten,

Thank you for your answer and it brings up another question. Are pooled depth limits considered unit boundaries for purposes of a Pugh clause? For example, if the Pugh clause provided that "production from the pooled unit will maintain all depths above the deepest depth drilled in the pooled unit", would the deepest depth drilled be required to be within the pooled interval?

4

Dear Mr. McKellar,

Without seeing the entire lease there is no way to know for sure, but if you are asking me to jump one way or another, Texas courts look to the 4 corners of the document for answers and have taken a position of literal interpretation, so the answer would be No, based on what you stated.

5

Dear Mr. Cotten,

Thank you again and I appreciate your contributions to this forum.