Hello Everyone, Is anyone familiar with Ovintiv? I’ve not had any dealings with them.
And, is this industry standard to ask for a two year extension without lease payment?
Lease Extension Proposal Section 29, Block 31, T1N, Howard County, Texas
Ovintiv recently drilled two horizontal wells through the West half of Sections 8, 17, and 20, Block 31, T1N which are scheduled to come online in early October. Ovintiv would like to see several months of flowback data on these wells before determining how to move forward with drilling wells through Sections 20 & 29, Block 31, T1N. Ovintiv currently plans to commence drilling horizontal wells through Sections 20 and 29 by March 21, 2023. Accordingly, Ovintiv wishes to amend the Oil and Gas Lease to extend the primary term as well as to clarify that the retained acreage for horizontal wells includes the acreage permitted under TRRC Rule 86.
Enclosed is an Amendment and Ratification which extends the primary term of the Oil and Gas Lease and clarifies the application of TRRC Rule 86 (“Amendment”). Ovintiv proposes the following in exchange for your execution of the Amendment: if Ovintiv has not commenced drilling at least two horizontal wells through Sections 20 and 29 by March 21, 2023 (“Drilling Obligation”), Ovintiv will pay you an extension bonus of $1,500.00 per net mineral acre (“Extension Bonus”); however, if the Drilling Obligation has been met, no Extension Bonus shall be due or payable.