Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 17, 2014 at 13:26

Most of the recent activity appears to be by Nadel and Gussman Ruston LLC drilling for oil in the Pettit and James formations.  These are conventional reservoirs with vertical wells.  I haven't heard anything regarding lease offers.  You might wish to swing by the courthouse and check to see if any leases have been recorded recently.

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Permalink Reply by Cuazy on March 18, 2014 at 5:13

Thank you for your reply. I appreciate it and enjoy all your thoughtful responses.

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Permalink Reply by Randy K on March 19, 2014 at 1:00

Probably going drill a horizontal Pettit well.

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Permalink Reply by Skip Peel - Mineral Consultant on March 20, 2014 at 10:58

Ab, why is N&D offering a lease if they have a producing well holding the old lease in force?

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Permalink Reply by Ab Atkins on March 20, 2014 at 11:08

Sorry, having some technical difficulty here. Skip, the landman says that Nadel wants to shut in the existing low volume well and "revaluate" via a brand new lease yet a clause in the existing lease would evidently cause automatic termination 90 days subsequent to shut-in. Nadel wants more time as it would appear.  

My apologies as it appears that my first reply to this post was inadvertently deleted. My above response is relative to my interest in an existing N&D well in this section 17.

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Permalink Reply by Skip Peel - Mineral Consultant on March 20, 2014 at 11:16

You may wish to speak with an experienced O&G attorney.  Especially if you feel that the offer is too low.  The old well may not meet the "production in paying quantities" test.  If that's the case the old lease is no longer in force.  And you may be in a good bargaining position for a new lease.

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Permalink Reply by 1kw6x71km1v37 on March 20, 2014 at 12:54

If the operator intends to develop further, the existing old lease is satisfactory. Let's assume it is, anyway. Now, the only conceivable reason for a new lease is to short you and better his position in the play. 

And as Skip says, if the old lease is void on account to insufficient or no production, naturally the operator wants a new lease from you, on reduced terms.

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Permalink Reply by Ab Atkins on March 21, 2014 at 3:21

Skip and Cheap Shot, thank you for sharing your insight which is much appreciated.

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