I've just been told that after holding mineral rights in our family since 1992, with moderate to minimal production, that our vertical well (unit) was plugged Dec. 20, 2016, after a new horizontal well spud in October 2016. The landman informing me said the older vertical well had 'ceased producing in February 2014' though the records he sent, and the OK county clerk said their records showed it was still producing in August or Sept of 2016. The landman indicated it was ... well... not his company's doing.
Am wondering how to interpret this paragraph of our deed. The production had varied since 2000, and was much lower after 2014, but I can see production was zero at different times through those years and it was only plugged after the new well spud.
222-MineralRights.jpg (34.4 KB)
If you stop receiving payments for a long period of time, certainly if a year passes with no payment, you really need to investigate. Remember that silence is permission.
Answer depends on all facts and circumstsnces, as well as OK law. Was the well producing during the relevant period and if not then did operator maintain lease by reworking, repairs or other operations. Does your lease have any clause setting numbet of days without production or will this be set by OK statutory or case law. Sales are not same as monthly production. Could just be sitting in tank. You would need to see run tickets and other data. You might talk with attorney about sending letter questioning whether lease expired before horizontal well was drilled. New leases have better terms, but financial effect will depend on your net mineral acres.
Apparently Cimarex/Devin received a demand to plug old well in June 2016, from Tributary Resources, there was still minimal production until August? Well plugged in Dec, after new well spud.
Apparently Tributary bought the lease in 2015, then Tributary started a "Quiet Title" case Aug 8, 2016, which is still open, with last action in April 2017 when Chesapeake was dismissed as a defendant.
Then apparently Paloma Partners bought the lease... I heard a little about them buying flipped leases.
I contacted Kingfisher county and will be sending payment for copies of lease and court case of "Quiet Title."
Maybe will see if I can find a way to contact others who were on a potential pooling order.
I was under the impression they were holding production over years due to low prices.
Am looking at sending a 'demand letter' myself, but not sure who to even send it to at this point. The court?