Completion Reports
Completion Reports
Completion Reports
February 01, 2018
APPROVED PERMITS FOR LOVING COUNTY FROM JANUARY 01, 2018 THROUGH JANUARY 31, 2018
8 PAGES/71 APPROVED PERMITS
CLICK ON LEASE NAME TO VIEW PERMITS
I have a question for anyone in the group.
Let’s say that you own a partial undivided ownership in a section (640 acres) where you have both mineral and surface ownership. You and the other owners secure a lease from a company to drill and access the minerals on the property. The lease is a sound one where you (the owners) get a 1/4 of the performance on that lease. It is, let’s say, a 3-year lease. The operator drills a well and the well starts performing. It continues to perform nicely even after the 3-year initial term and thus turns into a perpetual lease as long as the well performs.
Here is the kicker: In the terms of this lease there is wording that the well “MUST” be in continuous operation and produce something each month, and if for any reason the well fails to perform or quits performing for a period in excess of 60 days the lease will then terminate and expire.
I would read this as after the 60 days has lapsed and the lease expires, the owners would need to secure a new lease from the operator OR put the property up for a new lease with another operator.
How would you proceed if you found out that this happened?
What repercussions or actions should be taken if this did happen and the leasing operator just continued to start the well back up, let’s say 90-120 days later, and continued with production?
Or even more bizarre, a different owner/operator stepped in and started the production?
If a lease is the operating document we work from, doesn’t “IT” have legal precedent over the operation of the property?
The answer depends on the exact wording of the lease. Most leases contain language that the 60 days do not run if the operator is reworking the well—such as repairing, replacing casing, recompleting in a different formation—during the period that the well is not producing. Or the shut-in clause could come into effect; for example, it is a gas well and the pipelines were closed due to an emergency. You should read your lease carefully and consider all of the provisions, not just one, and call the current operator to find out the situation. If the well was simply shut-in without a qualifying reason or work, then the lease could have terminated. Be aware that some shut-in clauses allow a well to be shut-in not only for lack of market or force majeure, but for “any reason outside the control of the operator” and that could be interpreted as a hangnail. You or your attorney could then send a certified letter. The question is what you want to accomplish. Do you want an improvement to the lease terms? Or some compensation?
Approved permits for Loving County from February 01, 2018 through February 28, 2018.
52 approved permits/6 pages
Loving County approved permits from March 01, 2018 through March 30, 2018.
64 approved permits/7 pages
Clint Liles
Loving County approved permits from April 01, 2018 through April 30, 2018
52 approved permits/6 pages
CLICK ON LEASE NAME TO VIEW PERMIT