Question on end of lease

The lease was signed and dated March 6, 2016, and was for 3 years At the end of the lease March 6, 2019, there \was there was a pad site staked out. on checking with TRRC there was a drilling permit approved on 1-29-10 and again on 2-29-19. On March 23, 2019, they were observed on building a drilling pad. On checking the lease it reads. then in the event this lease is not otherwise being maintained in force it shall nevertheless remain in force if Lessee commences operations for reworking an existing well or for drilling an additional well or for otherwise obtaining or restoring production on the leased premises or lands pooled therewith within 90 days after completion of operations on such dry hole or within 90 days after such cessation of all production. If at the end of the primary term, or at any time thereafter, this lease is not otherwise being maintained in force but Lessee is then engaged in drilling, reworking or any other operations reasonably calculated to obtain or restore production therefrom, this lease shall remain in force so long as any one or more of such operations are prosecuted with no interruption of more than 90 consecutive days, and if any such operations result in the production of oil or gas or other substances covered hereby, as long thereafter as there is production in paying quantities from the leased premises or lands pooled therewith. Does staking a drill site and filling for a drilling permit meet the legal definition of engaged in Drilling. Has or has not the lessee met the legal description?? What should one do?

You didn’t say where your lease is located, but based on the dates and other information you mention I believe this involves an area of Reeves County I’m familiar with. If that’s correct I think you’ll find the well covered by the February 28th permit you mentioned was spudded as soon as RRC approved that permit and is still drilling which would extend the term of any lease acreage included in that unit.

The continuous drilling wording you quoted indicates if it is past the primary term of the lease any of your acreage that wasn’t included in the unit where that initial well is being drilled would be released within 90 days after the first well is completed unless another well is drilled in that, or another unit, that covers that additional acreage.

If you can probably get more details if you will post your questions under Reeves County section of the forum and give the location of the acreage you are talking about.

Dusty you are correct NE4 section 82 block 4 Reeves co. As of March 23 I have pictures of them building a pad and pit. Nq rig.

Here’s a link to the plat of the Luxe Russells Reserve 8-82S that is currently being drilled from a pad located in Section 8 of PSL Block C-18 but has parts of Section 82 included in the unit.

Thanks Dusty, isn’t this that the South 1/2 of section 82 block 4? I’m not sure how to find the north half info. Would appreciate the past help and any future help you might provide.

On that Luxe plat look at the tract they labeled as #7.

If you’re mineral interest is in the NE quarter of section 82 that says 34.35 acres of your undivided interest was included in that Russells Reserve unit.

You mentioned a pad being built that you have pictures of. Is it in Section 82?

Dusty thanks for the info. Yes I have a picture on my phone however, being an octogenarian, I may have a problem attaching it to this note . (Will try) the API is 38938009 for the well and the number on the TRRC

site on section 82 is 38009

RRC shows API 38938009 is a permit for a salt water disposal well issued to Hadaway Consulting. The pad for it is located in Section 82 but it wouldn’t have any impact on your lease since it’s not being drilled as a producing well.

The horizontal well currently being drilled by Luxe appears to be the one that covers part of your acreage.

Dusty thanks for the past help. Today I received a Division Order/transfer order/transfer order Declaration of interest. This is on minerals I have never signed a lease for. Any recommendations

Does the division order cover the mineral interest you mentioned earlier that is in Section 82 of Block 4 and are they asking you to ratify an existing lease?

Luxe recently finished drilling a well there and MDC filed permits last week for 4 more in that section.

No this land in Ward county. Thanks for the reply

Did you get a division order or a declaration of interest? These are very different documents with differing legal consequences. Are you an unleased mineral owner in a producing well or in a proposed well? You need to post more information to get any suggestions.

It says a division order.

Are you an unleased mineral owner in a producing well or in a proposed well? I never signed a lease, as to producing or proposed, Drilling was proved on a hormonal well by TRRC on May of 2018 and again on July of 2018 SE/2 section 214 &215, Blk 34

ERI may mean Excess Royalty Interest and refer to an override. Do you own minerals or an overriding royalty interest? Are you a royalty owner in an existing well in the same section(s) so that it is the same lease for the new well?

No. Nor have I ever signed any lease in that county.