landowner

Holding a lease

We are leased to Southwestern Energy. Exco bought the right to

develop only the deep shale from SW.

Exco put part of the lease in a 15000 foot well.
The lease expires soon with no more options.

 

1. Can SW or Exco hold the lease on the rest of our property

with this one well ?

2. And what about the James Lime on all of the lease that is

still held by SW.

Views: 49

Replies to This Discussion


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on September 15, 2010 at 5:26
If there is no horizontal or vertical Pugh Clause in the lease then Exco has all your deep rights and SW has all you shallow rights.

landownerPermalink Reply by etx44 on September 15, 2010 at 5:59
So if the lease expires with no more wells Exco can hold the part they put in a well, that I know.

Will SW loose "all" the lease and Exco part of the lease back to us ?

Oil & Gas ProPermalink Reply by Two Dogs, Pirate on September 15, 2010 at 6:07
If there is no Pugh Clause in your lease then they hold everything as long as the well produces.

landownerPermalink Reply by etx44 on September 15, 2010 at 6:26
I have a Pugh Clause that lets acreage not in a unit expire. But no horizontal or vertical Pugh Clause.

If I were still dealing with only SW I would understand this lease. But with Exco puting part of the deep part of the lease in a well I do not know what will happen when the lease expires.

Oil & Gas ProPermalink Reply by Two Dogs, Pirate on September 15, 2010 at 6:58
You have a horizontal Pugh Clause. They can hold what they have in the unit. If there is no vertical Pugh Clause they will hold from the surface to China, SW shallow and EXCO Deep.

landownerPermalink Reply by etx44 on September 15, 2010 at 7:35
So legally Exco's deep well holds SW's shallow rights.

Not what I wanted to hear, but I understand now.

Thank's for the help.

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