If at the end of the primary term of this lease, a well or wells are producing or have the capability of producing from the leased premises by either being situated on the leased premises or by being in a pooled unit with the leased premises, this production will extend this lease beyond the primary term for only the part of the leased premises which is included in the pooled unit or units.

 

 

      What defines the well as capable of producing? Also, what is a pooled unit and how would we know if we are in a pooled unit?

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This basic horizontal Pugh or pooling clause requires the release of the development rights for all lands not included in a producing drilling and production unit.  In other words all the lands under the lease can not be held by production on only a portion of the lands.  What is not being produced, and paying royalties, must be released by the lessee.  The mineral owner would then be free to enter into a new lease for the lands no longer covered in the original lease.  The state requires all mineral interests of record (those with instruments evidencing ownership in the parish clerk of court records or those of the parish tax assessor) receive a notice from the company applying for a drilling and production unit.  A well that produces before the end of the primary lease term may be held past that date either by continued production or by shut-in payments contained in the lease agreement.  Deborah, if you post the section-township-range information for your mineral tract we can tell you if it is included in a unit.

Section 6, township 15 North, Range 8 west      Does the well have to be actually producing to extend a lease? Our lease was to expire on April 11 but the well wasn't turned on for weeks after.

 

No.  As long as a well is spud prior to the lease term expiration date and operations are continuous to completion resulting in production, the lease is held in force.
 Thanks Skip!
Deborah, I got my division order today for the well in 6-15-8.  If you haven't received your's yet, keep an eye on the old mail box.  It's out there somewhere!
That's good to hear. Do you mind me asking who holds your lease? We just found out that JW Operating sold ours to Endeavor in 2009. I spoke with Endeavor and was told that we should have a check soon. I believe that the people leased with Questar received their first check a few weeks ago.
The DO came from QEP, out of Tulsa.  As memory serves, am sure we signed originally with Will Drill.  Hope this is what you're asking.

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