Hello, all
As mineral owners in Eastern Montana, we recently received an attorney's letter representing a developer who is requesting the O&G Board create a new temporary spacing unit for the purpose of drilling a horizontal well there. Is there any reason for us to attend or send a representative to the Board hearing on this?
The fact that a developer wants to drill here, is, of course exciting, however I'd like to understand more about the reason behind the driller's request to change the spacing units in the proposed area.
Any advise/info here greatly appreciated, as usual!
Mark
I just thought of an answer to my own question here, so bear with me and see if I'm right....The original spacing units established were based on traditional, vertical drilling. Now that horizontal drilling is become more common, larger spacing units are desirable to include areas previously unaffected by vertical drilling?????
Mark, the temporary spacing unit can be used in exploratory drilling because they don't know what they will find be it oil, gas or an oil/gas hybrid well. When they know what they have drilled, then they ask for the appropriate spacing.
If you are leased, I don't believe you need attend. Probably would not need to attend if unleased.
Thanks, RW...we are leased, although the company that is asking for the temp spacing is not the co that has our lease.
If your lease has a pooling clause would say that most things you could object to are no longer your responsibility but your Lessees responsibility now.
Yes, we do have what I believe to be a pretty standard Pugh Clause (as well as a vertical Pugh Clause).
Thanks very much...you have helped clear this up for me!
RW, your mention of pooling got me thinking about the timing of our lease and the news of another operator's intentions to drill. I should probably let this lie, but I'll ask anyway....we just e-mailed last Friday, our lessee, scanned copies of our signed and notarized lease to them, and are awaiting the bonus check. 3 years ago, when we 1st leased with them we received or check in about 10 days after sending them scans of the signed and notarized lease. At inquiring about when we might expect the bonus, we were told " you will get your check in 30 days". The 1st item on the addendum to our lease states "The signing bonus shall be payable by Cashiers Check, in advance, and shall be tendered prior to the execution of the lease" . My question is, until we receive our check, and they receive the original copies, the lease has not been executed. Correct? I'd like to exert some pressure to get our check sooner than 30 days if possible, with a not so veiled threat of not going through with the lease. Or am I too late for that?
Mark, the lease has been executed, you e-mailed them proof that it exists. I don't think Montana is as crazy as the law in ND but I would take no chances. I would immediately go on record That I have not been paid and that late payment is unacceptable. In this case, silence could be as good as permission. Now then, this does not mean you can't confirm this lease any time at your option later on, by cashing the check or giving written notice. Yes the notice of late payment being unacceptable could cause a drawing up of some parts of anatomy from the lessee's side but the terms of the lease as you have related them here are clear. In your place I would be on record that i have not received payment and that fact is unacceptable, for my own financial wellbeing. I would suggest you discuss this with your lawyer.
Thanks, RW that helps a bunch. I'll follow through with the suggestion about going on record...and let it go at that and see what happens.