I’ve been approached by a couple of companies to lease recently, we leased in 2018 with a clause below 8850’. landman recently told me they show I’m no longer held by production by the well on our property, but I’m not sure its true. a gas well has been on our property since early 80s the RAWSON 1-30 hasn’t had production in several years, but per my conversation with corp comm a year ago my understanding was they could hold the lease. hopeful someone can enlighten me
Last production on the Rawson was in October 2021. Mach Natural Resources was the operator. Request a release of lease from them be filed in the county courthouse. That will formally release it. Your lease may have expired by its own terms so that is why landmen are trying to lease it now. Go back and read your lease to see if it had any clauses that would hold the lease past the end of the primary term. Some have have a 180 day clause or something similar. The original depth for Rawson was 8770’, so you should be open at the upper level and the lower level.
It would be wise to get an oil and gas attorney to review the new lease drafts. They are rarely in the favor of the mineral owner and need significant edits. Horizontal drilling is heading your way and the new lease could hold your family for decades, so wise to invest in good counsel up front.
Thank you kindly, I have what I consider a good exhibit A. in the conversation back and forth so far the only disagreement is with the no deduction clause, which is a big one for me. Im in no rush to lease, especially with the bonus offers being about a third what I was payed in 2018. Not much to go on as far as pooling around my section.
Still, not a bad idea to get a release.
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Oklahoma has a peculiar approach to this. I forget the style of the case, but if a well was producing before shut down it can continue to hold by production even after shutdown. As I recall. But then, my senile dementia does play tricks.
A well only holds a lease while it is producing (in economic quantities) or has an extension clause such as 90 or 180 days in which to fix it.
If a well is shut in-usually before it goes online, then that clause may hold a lease for quite a long time unless you limit the time frame in the lease. In the old days, a well could be shut in until a pipeline for gas or tanks for oil were built. Some operators use creative interpretations of that clause to hang onto leases far longer than was meant. A few operators shut in wells during COVID and then opened them back up (or not) once they had enough crews back to work to handle them. IF they do not pay the shut in fee on time. then the lease can expire.