What happens if a well is shut in beyond lease terms?

If a lease was signed in late 2008 with a three year primary term.  A well was drilled and completed a few months after the primary term.  No lease extension was executed.  A pipeline was never put in place.  Sonris shows the well status 36 and waiting on a pipeline as of 2/2/2012.  Shut in payments were paid the last two years.  The lease was written by a oil and gas attorney and included

"LESSEE cannot hold this lease under the shut-in royalty provision for more than two (2) years in aggregate beyond the-primary term of this lease or any extension thereof."

It is now over two years past the primary term.  The well pad is on the property of the land in question.  Is the lease still in effect?  Who owns the well?  Any thoughts from the experts other than go see an oil and gas attorney.

Thanks in advance.

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Permalink Reply by Brian on January 22, 2014 at 15:04

I spoke to a O&G attorney today on the phone.  He of coarse said what most everyone here has said and that he would need to read the lease.  I suspect we will seek formal council eventually.  We will likely wait and see if they send a third shut in check.  I will up date the group in a few months.  Thanks again for the information.

Permalink Reply by adubu on January 21, 2014 at 17:03
Brian---This answer is a little simple but if it's your wife's lease and was written by a very good oil&gas attorney why not seek consult with that experienced attorney who wrote the lease. Then report back to us what he said. That would be great information education for all that read this blog :-)
Permalink Reply by Bill R on January 21, 2014 at 19:50

We have a 'long term' shut-in with Atoka Operating for the Solomon Well #1 (Vertical Straw @ 8500') - API 419-31244 in Shelby that was completed 01/28/08 and validated 02/12/2009.... still getting my $1 per year from it!  Lease is from 2006 and as far as I can see nothing has ever been produced from the well yet.

Spent quite a bit of money on Certified Registered letter with the Post Office... more talking to a Lawyer and still have nothing other than our yearly $1 and it is driving the family crazy. Had a friend go to the office that we were working with Atoka through only to be told it is empty with mail piled by the front door drop. If anyone knows anything about it, I would love to hear from them!

Permalink Reply by jffree1 on January 22, 2014 at 8:21

Bill, that well is under a plugging extension until 3/2014. If you will do a W-1 search here by typing in 41931244 for "API Number", when the results come up click the API # (not lease name) &  you will get a page that has live links (underlined) at the top. Click and explore those to see additional RRC comments and status pages.

Permalink Reply by Bill R on January 26, 2014 at 14:41

So does that mean that the well will be plugged after March of this year? Reason I am asking is we have just received another check for $1 for Shut-in 2014... and would the plugging free up the property for lease again?

Thanks

Permalink Reply by Mike Bradstreet on January 26, 2014 at 16:00

Bill check the wording in the lease, lack of production may nullify the lease, you won't need to wait until well is plugged.

Permalink Reply by Mike Bradstreet on January 24, 2014 at 16:59
If they send shut in payments return and refuse with explanation lease is expired. If they later produce the well claim 8/8 of the production attributable to your acreage.
Permalink Reply by Bill R on January 26, 2014 at 14:45

Would do that, however the way that Atoka gives us the check is via Certified Registered Mail with no name to verify whom it is from... have to sign to find out!

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