1 person (MO1) owns 40 acres but has mineral rights to only 20 of those acres .  A second person (MO2) owns the rights to the other 20 acres.  Petrohawk leased all forty acres from both mineral rights owners (MO1 & MO2) for 3 years (20 acres each).  MO2's 10 year mineral ownership expired during the lease but before any production.  I know the mineral rights for the 20 acres of MO2 transfer to MO1who will now own the rights for all 40 acres.  What I don't know is what happens to the lease that MO2 signed which has not expired ?  Will Petrohawk now have to renegotiate the lease with MO1 for the 20 acres or what happens now ?

P.S. I'm pretty sure (not positive) a well is currently being drilled on a section (T8N-S12-R12W) that has been unitized with the 40 acres in question T8N-S15-R12W (HA RA SUW).  Any help would be greatly appreciated.  I did research but couldn't find an answer.......

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The lease remains in effect regardless of who owns the mineral estate. Conveyance of minerals by deed, donation or prescription does not negate a legally binding oil, gas & mineral lease.

One more question:  Who will get the royalties ? Am I correct that MO1 now owns the rights and will receive the royalties since there was no producing well when MO2's 10 year ownership expired even though MO2 signed the lease ?  Thanks!

Prescription is interrupted by a good faith effort to produce, not just by actual production. If a well was drilled on the servitude or in a unit in which the servitude is pooled that would serve to reset the ten year clock even if was dry and plugged or plugged and abandoned.  If there was no well drilled during the prescriptive period the owner of the surface now owns those mineral acres and would receive the royalies.  It is always a good idea to notice the operator of the well/unit that minerals have precribed to you and send a copy of the instrument which created the servitude. 

As far as I know, there is no well in that section (T8N-S15-R12W) and If I'm interpreting it correctly, it was pooled with T8N-S12-R12W (seems odd the 2 sections are not contiguous).  However, I think a well has was permitted in the other section either in Oct or Nov.  I really do appreciate your replies and the very educational information.....Thanks

no they are not pooled togetther. different fields.

 

Section 10 has a well (surface in sec 3), but 15 does not as of yet.

Here's the map that led me to believe that sections 15 & 12 were pooled.  They are both labeled HA RA SU W so I just assumed they were.

Attachments:

As The Baron states, the two are not pooled together.  Section 12 is HA RA Sand Unit W in the San Miguel Field and Section 15 is HA RA Sand Unit W in the Zwolle Field. 

OK thanks, I don't really know much about it but I'm learning more everyday thanks to all the replies.  I really appreciate the help !!!

Many horizontal wells are drilled from an adjacent section. That and the fact that SONRIS organizes wells by the section where the well pad is located means you have to pay attention to the section with the bottom hole location as that is the one being produced.  If a well was spud before the servitude reached it's expiration date then the servitude is still in effect even though the well has not been completed.

Looked at SONRIS and didn't see any wells in adjacent sections on all four sides so I should be in good shape.  Thanks

There has been some debate aboutwhat happens to the prescription whan a well has a surface location outside of the unit boundries.

 

There is no specific case law and the mineral code is lacking in dealing with horizontal drilling. But it has been suggested that  presscription may not be interupted until the well bore actually penatrates the unit boundry. Others say that the spud date is all taht matters.

Baron, I am aware of one case where a horizontal well spud in an adjacent section prior to lease expiration but the lateral did not penetrate the section to be produced until after the expiration date.  The mineral owner pointed this out to the operator and offered to sign a new lease with slightly better language and a modest bonus.  The operator accepted. 

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