Dewey County, Section 27, 17N, 15W

I have received an offer of $300/acre and 3/16 royalty. The lease term is 3 years. The lease stipulates it is the intent of the lease to cover only the Morrow Formation. I have not had a lease in the past stipulate coverage for a specific formation. Any other lease offers out there for this area? How exactly does the stipulation affect the lease? Thanks for any help.

That lease is essentially a lease with a depth clause above and a depth clause for below. It needs to be very specific as the the Morrow as defined in a particular well with depths. Just using the word Morrow can be a loose definition. I would be concerned about the other clauses in the lease such as commencement of drilling, shut in time frame, post production charges, etc.

Thank you for your reply. I have requested an addendum for no post-production cost deduction. There is a two-year shut in limit. If I understand your reply, I need to have them state the depth clause for how shallow and how deep they will drill?

I prefer a shut in time frame of two years cumulative, not “continuous” as that has a loophole in it.

I am a geologist. Using a geologic term can be a bit loose as one geologist may call the Morrow a certain set of depth calls and another geologist may call it a bit differently. It is best to define the Morrow as it is defined in the closest well nearby to get a more technical limit on the planned drilling. Is this for horizontal drilling or vertical as that may require another phrase for delineation. There are already two Morrow penetrations in the section, so not too difficult to determine.

Were you force pooled for the Barbara Horizontal well or did you have a lease? If you had a lease, you may have been held for the Morrow and need a release of lease by Devon. The well has not produced since Jan 2017. Technically, your lease expired, but you might want an official release of lease.

It is for vertical. The mineral rights were inherited so I am not for sure about the pooling. I have a copy of a Devon lease for the Barbara well and will need to take a look at it to determine if a release is needed. You have been extremely helpful and I very much appreciate you insight and knowledge. Thank you!

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