Division order language is: “. . . as to that depth interval from the top of the Bone Spring Lime formation to 600 feet below the top of the Wolfcamp formation.”
The well in question, Kath Unit 3-11 656H, is in Phantom Wolfcamp and is at depth just below the Bone Spring.
There is a Pugh clause in my lease that states, “. . . the depths down to and including one hundred feet below the base of the deepest formation then producing in each said unit.”
At the end of the primary term and when the Pugh clause kicks in to release the lease (due to no more drilling, etc.) what am I going to get back assuming no more wells are drilled deeper than this one in question?
According to RRC records, the Kath Unit 3-11 is a pooled unit covering the section, consisting of 2 tracts - one of 626.53 acres owned undivided by Julian Kenton et al and second of 6.6 acres owned by BNSF Railway Company. Four wells have been drilled in the unit, Kath Unit 3-11 # 601H; # 603H; # 605H and # 656H. Completion report (W2) for # 656H shows it is producing in Wolfcamp formation per Formation Record on page 3. The language that you have attached indicates that the well will hold all of the Wolfcamp formation plus 100 feet below the base of the Wolfcamp. So depths below 100 feet below the base of the Wolfcamp formation will be released.