Lease Holding

General Mineral Rights Discussion
1

When does the current lease holder/operator secure the lease before an extension bonus comes into play?

Equipment on site?

Spudding?

Drilling?

Production?

Pecos County

Texas

Section 32 Block 49 Township 8

Thank You

I have learned so much on this forum the last 3 years

Carey Thomas

2

Hi Carey -

If you mean what action(s) on the part of the Operator would make paying an Extension Bonus unnecessary, then it would depend upon the specific wording of your Lease.

Generally speaking, however, “commencement of operations for the drilling of a well” would hold the Lease, so long as the company’s efforts are reasonably continuous and in good faith.

That would include things such as building a roadway, building a Pad or Drill Site, moving equipment in, setting up a rig, etc. Not necessarily the actual Spudding In of a Well (although some Leases are worded that way).

Production, obviously, would hold the Lease until the production ceased.

Hope this helps -

Charles Emery Tooke III Certified Professional Landman Fort Worth, Texas

3

Thanks Charles

That was exactly the info I was looking for

I will go through the lease and check on wording

Carey Thomas

4

If you want me to take a look at it, you can scan it and add it here.