What are the pros and cons of leasing different depths. It seems that in areas where landowners are more experienced this is a bit more common. The Eagle Ford is fairly deep in Lavaca county, 10,000’ or deeper. If a owner leases all depths of his tract then potentially shallower plays, like the Wilcox, Yegua, Jackson ect may get locked up by operators who have no interest in developing them but tie up the land by production. A lot of little guys make their living out of playing the shallows. The fact that it is much cheaper to drill to those depths makes this the place where small independents can flourish. $1200/acre for leases kills that. So, what are the advantages and disadvantages to only leasing selective depths when negotiating terms
in our case in goliad county chisolm oil and gas said his permit is only for 7000 ft our lease with them just ran out he said he is trying to sell to another operator his stuff on our lease the pumps and what ever else he has there he said if is able to sell it would be to someone else that has 7000 ft permit , i have a question when some one leases is it for all the acres we have and no one else can lease on the same acres and put up another well with permits that are for a deeper footage or can multiple leases be on the same acres of land with more wells
in our case in goliad county chisolm oil and gas said his permit is only for 7000 ft our lease with them just ran out he said he is trying to sell to another operator his stuff on our lease the pumps and what ever else he has there he said if is able to sell it would be to someone else that has 7000 ft permit , i have a question when some one leases is it for all the acres we have and no one else can lease on the same acres and put up another well with permits that are for a deeper footage or can multiple leases be on the same acres of land with more wells
Andy, generally you should put a clause in your lease that releases depths below a producing sand. Say you have a lease that is being held by production from 2000’, without the release clause, as long as that sand is producing, the oil company can hold the lease for all depths as long as there is production. Many old leases did not have that clause and are still being held by the producer for all depths and are now only producing small amounts of oil or gas.
So, if the release clause gives back to you the right to re-lease the lower depths and a new formation, like the eagleford, is found you can lease those lower depths to another company. More bonus money to you instead of the initial producer. BC
My thoughts on the subject and I am no lawyer, but mine always puts this in our leases.