PLEASE, can anyone help explain this lease assignment info ? My lease expires next month. Would I now get 2 leases for different depth assignments ? DOes this mean there activity ?
HELP please >>> Who knows about this area ?
Continental Resources made a conveyance of the old lease to Mewbourne Oil from the surface to the base of the cottage grove formation. Continental Resource is wanting to lease from the base of the cottage grove formation and deeper. When Continental made the assignment they also gave Mewbourne the exclusive right to renew leases in this township. You could possibly have two leases for this same tract. The cottage grove formation is also the producing formation in this township and will more than likely be released.
Thanks !
If your original lease did not have a depth clause, then any producing well will continue to hold the Lease past the primary term. If you did have a depth clause then that provision would govern what depths become open of record after the primary term. The assignments do not change the provisions of your lease.
If you had a depth clause on your original lease, then yes, you would be able to lease the open depths after the primary term, and yes you could have two leases covering your interests in the original tract.
However, if by renew, you mean that you had an option to extend, then any payment from any of the leasehold interest owners would suffice to extend your lease past the primary term. It is up to the leasehold owners to work out between themselves how they arrange those expenses. If this is the case, then you would still only have the original lease.
More information about your original lease would help. Did you have a depth clause? Was there an option to extend?
The original lease had no depth clause. It was 3yrs. with 3 extension ending this Nov.2015. I was never notified about assignment but was told in renewal talks. If there's 2 leases wouldn't I be notified for renewals simultaneously for the entire tract ? Does the assigned portion's lease expire the same date as my primary agreement. Or if there has been well activity aren't I notified by the assignee ? which in turn would extend that portion of the lease?
No. Assignment of a portion of a lease does not create a two separate leases. It merely means there are multiple owners of the same lease. As long as any one owner fulfills the requirements to continue the lease beyond the primary term or to extend the primary term, then the lease will still be valid as to the premises covered by the legal description.
You would have to check to ensure that there has been well activity on your property sufficient to hold the lease beyond the primary term in accordance with the provisions of your lease.
Not necessarily. You could have a depth clause in the Lease and if there is a vertical Pugh Clause then depending upon how that vertical Pugh Clause is worded, part of the leased depths could be released back to the mineral owner if production has not begun by the end of the Primary Term.