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Posted by Char on May 29, 2025 at 14:42 — 4 Comments
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Oil & Gas ProSkip Peel - Mineral Consultant said…
Bubba, I just saw my earlier response about promising to get back to you with a more detailed answer. Here it is. As I mentioned previously, lessees do not agree to Continuous Drilling Clauses for the average mineral owner. Since a lessor can't get a CDC they must depend on beneficial and protective lease language to balance their interests. Some mineral owners may have sufficient acreage to allow them to get a lease covering a limited and defined formation or zone. All mineral owners should get a standard depth clause often called a Vertical Pugh clause. That clause limits a lessee development rights based on the deepest production established in the primary term of the lease. Why would a lessor not want multiple wells? The more wells drilled the better. Every leasing case is different as every mineral estate, Play and active operators combine to create unique circumstances. Therefore it is difficult to give specific suggestions to general leasing questions. Regards, Skip