People with Depth Clauses in their leases

I just learned CLR is wanting to drill in my section again but they want to drill deeper. They are not offering much to drill beyond my depth clause. Jackfork offered me $1,000, so I asked if this was a $1,000 per acre and the fellow said no. That is for the whole thing. Should I get an amount per acre before I agree? What is the risk that I get pooled at these deeper depths? Can they pool us with depth clauses?

Giving the section, township and range would be more helpful. What horizon do they plan to drill? The wording of your depth clause will be important in the answer to the question.

They are drilliing 5 new Cunninghams with 2 to start in Section 29-07-06 and 3 to be in 32-07-06 drilling into 5-06N-06W. It looks like the Mississippi Lime and Woodford going below 14,100 feet as deep as 23,507 feet.

Which section are you in already? They are requesting five Mississippi Lime wells total and six total Woodford wells.
The Nunn 1-32H was drilled in 2012 and holds the Woodford for section 32. The Chester 1-32H was drilled from 5 north into 32 in 2015 and is a Springer well.

The Chester 2-5XHS was drilled from 32 into 5 in July 2019. The Chester 3-5XHS was also drilled in 2019. Those were both Springer wells. The Miss Lime is between those two. That is why I am a bit confused by your “deeper” question. Are you sure you are not talking about infill wells for 32? Or are you in section 5 and you have Springer wells and they want the deeper Woodford?

When did you lease and in which section? Does your depth clause have a “producing” word in the clause or a “penetrated” word in the clause?

The depths you quoted are for measured depth, so it is including the long lateral length, not a vertical depth.

Mr. Gordon- If you own 0.50 net acres, the $1000.00 is not a bad offer. If you own 10.00 acres, it is a bad offer. You didn’t mention the royalty being offered either so there are plenty of things to consider besides the total dollar offer.

As M. Barnes is implying, if the section you own minerals in has a Springer well and your OGL has a depth clause that has caused the deeper zones to be open for lease, then you can lease below the Springer. If your section has a Woodford well, the depth clause won’t benefit for any shallower zones.

I am in Section 5. The Cunningham is the well in this section. Last year, the completed the Chester 2 and Chester 3. THe next 5 wells which is going next week to get permits will be named Cunningham 2, 3, 4, 5, and 6. I am leaving off the prefixes. In other words 5 more Cunningham wells all drilled from 29 and 32 into Section 5, so multisection wells. I believe they discovered something when they drilled the two Chesters.

I thought the Springer from the Chester would be deeper so that these new wells would not require a new lease for the depths but a person from Jackfork has already called offering $1,000 for all the acres. The managing partner laughed at him. We own more than .50 acres.

When the permits come out, they will have the reservoir and the depths on them.

The Cunningham 1-5H was a Woodford well. If you have a lease, then you are held from the surface to whatever your depth clause says below the Woodford. The top of the Woodford was 14,339’ MD. The perfs are from 14709-18948, so the lateral part of the well.-not vertical The completion report has the tops for the Checkerboard 9695, Cherokee 10996, Redford 11991, Springer 12878 and Woodford 14339.

The Chester 1-32H was drilled from 5 into 32 and is a Springer well. The top of the Springer is at 13241 MD. Perfs from 13329-18276-again the lateral part of the well.

I have attached a stratigraphic column of the OK shale plays. Look in the left column for the Anadarko Basin SW Oklahoma. The Springer Formation is above the Mississippian Limes which are above the Woodford. The Hunton would be below your wells. So if the permits list the Hunton, maybe you can lease deeper, but if they say Miss Lime, then you are probably held.

http://ogs.ou.edu/docs/geologynotes/GN-V76N2P21-30.pdf

Thank you for the information. I received the information from CLR last week for the 5 new wells, a lot of info to swallow for info on 5 wells at once. The call from Jackfork just got me thinking. Why would they bring up a new lease for the depths of the new wells if it wasn’t relevant? I am just curious if we hold out and they refuse to go higher than $1,000, then could we get pooled? I am assuming they have to negotiate with the other mineral owners and some may not have depth clauses due to leases done earlier than ours.

Also, from friends in Section 32, the Chester 1 never paid out a dime. I was not counting on anything from Chester 2 and 3 due to this but was pleasantly surprised in January.