Status of Lease and where to find info?

Oil and Gas Leasing Help
1

Our family owns the surface and mineral rights on two sections in Reeves County, Texas. Four and a half years ago we leased both sections for three years plus two more.Th

Since that time the lease has been sold, resold and gone through bankruptcy so it is now unclear what the lease status of the land is.

Where could we find state or county records to clarify the lease status. We have sent an e-mail to the General Land Office but as of yet not had a reply.

Thanks, Ken

2

Dear Mr. Haag,

You will not find out anything from the GLO, unless it is a Veteran's Land Board lease of a Relinquishment Act Lease on mineral classified lands, both of which I doubt is the situation.

Short answer, if the lease has been properly maintained, the lease is in force and effect. It appears that in about 6 months, absence operations, drilling or other items that can maintain a lease past its primary term, the lease will expire and you are free to lease the lands again.

3

Thanks for your answer.

A further complication. They drilled a gas well on the corner of one of the sections. This well has had minimal production. According to the way I read the lease this well would tie up 320 acres at that depth. Since they haven't done any added work does this well tie up the whole two sections or only 320 acres?

Thanks again,

Ken

4

Do you have pugh clauses?

5

After looking up the defintion of Pugh Clause, and re-reading our lease, it looks like we do have a Pugh Clause
6

Horizontal and verticle I hope.

7


Yes both Horizontal and Verticle
8

Next question: Since the PUGH clause does not become effective until later this year it has been suggested by other family members that the state may allow the lease to be amended. Our grounds would be that the present operator has not provided any follow up activity from the initial well in 2005 and is not maintaining any more than minimal production from this well.

Would an amendment of this lease to eliminate the waiting period until later this year be possible and how long would it take ?

9

Mr. Haag,

A pugh clause needs to be triggered --- generally. Typically, they begin.."In the event lands covered by this lease are pooled or combined with other lands..."

Is your lease pooled with other lands in order to trigger the pugh clause? This is where many landowners get hurt by not having representation to begin with. No pooling, no pugh clause. You would need a "special" type pugh clause to get that treatment, or better, a retained acreage provision, which you may have.

10

The way we read the lease the trigger for the Pugh clause is 2 years after the main term of the lease which is in Oct. 2011. We have already been told we made a mistake in leasing both sections one one lease. Is this what you mean by "pooling"? We read the Pugh clause to say that the well site would retain 320 acres that the well is on.

Also does it make any difference that the land is described as Public School Land Survey and the State of Texas gets half?