Directional Drilling

I entered into a lease with EOG Resources for a 3 yr. lease with a 2 year extension. Before the 2 yr. extension expired, EOG assigned the lease to another Oil/Gas Co. The 2 year extension expiration date was 5/27/2015. I did not hear from either company so believed because of the drop in oil and gas price that there was no longer a desire to be drilling on our property (I own mineral rights along with many family members). In April I received a letter from another oil/gas company asking me to sign a Division Order, tax info. etc. I had not heard of them before nor the referenced property name shown. I called their Landman agent and was told they drilled a directional well that goes through our property. When I told him I believed my lease had expired I was advised clause 6 of our contract states if a well is producing within 180 days after expiration a renewal of a lease does not need to occur. My review at the Railroad Commission of Texas showed the well in question was producing Oil and Gas (I assume a vertical well at the time) to Feb. 2015. There are no entries of the following months through Jan. 2016. I also found a pooling authorization dated 7/24/14. An application for permit to drill, recomplete or re-enter was approved on 9/22/14. Before signing the Division Order I'd sure like to know that the advise the Landman gave me regarding my lease is accurate. Have they dealt with my lessee. Any info someone can share with me would be greatly appreciated.


Most leases require that "operations" begin or else they expire. Operations can mean several things, like obtaining a permit, staking out a well pad, surveys, etc. My lease was similar to yours - they "began operations" (not drilling) before the lease expired, but it was still almost two years after the lease expired before the well was drilled, completed, and put into production. However, my lease remained valid because they "began operations", such as constructing the well pad, obtaining a drilling permit, etc.

Thank you for taking time to respond. It sounds like everything must be accurate what the landman told me.