Do leases in Colorado have to have wording that unitizes acres by section etc to insure that drilling one well on a lease that covers several sections won't tie up all sections in the lease by drilling and producing one well?
Jim,
From a practical point of view, the operator needs to have the right to establish drilling units then production units for the benefit of both parties. You can provide a condition in a lease that prevents acreage not in a producing unit when the primary term expires from being held by production from other wells. I believe Colorado has legal cases that allow the mineral owner to reclaim leased minerals not under production but the legal solution is most likely more expensive than documenting the intent in the original lease.
Thanks for the information. Your information is very informative.
Jim Broadhurst
Gary L. Hutchinson said:
Jim,
From a practical point of view, the operator needs to have the right to establish drilling units then production units for the benefit of both parties. You can provide a condition in a lease that prevents acreage not in a producing unit when the primary term expires from being held by production from other wells. I believe Colorado has legal cases that allow the mineral owner to reclaim leased minerals not under production but the legal solution is most likely more expensive than documenting the intent in the original lease.
Gary L Hutchinson
Minerals Management