Horizontal drilling for unleased

If you are not leased can they drill horizontally under your property?

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Permalink Reply by ShaleGeo on June 15, 2022 at 14:11

Yes.  But to give you any more advice one would need to know a lot more about your situation as to location and acreage amount.  

Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2022 at 15:24

It would be helpful to know where your property is located since the answer depends on state law.  Texas or Louisiana?

Permalink Reply by aaron naquin on June 15, 2022 at 16:28
Sorry, Louisiana.. Section-30,Township-17N, Range-15W. Well was drilled in NE corner of our section and we own all the land around it, we are unleased with 36 acres, our lease ran out right before they drilled in 2011,so we have/do not receive royalties
Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2022 at 16:50

You say you own the land around the surface location?  Did you sell the land for the drill site?  Just to be clear, you were leased by Chesapeake but the lease expired before the well was spud on April 11, 2011?  If this is so, you may have a case for "sub-surface trespass".  My take is that if Chesapeake didn't get a sub-surface easement because they missed the fact that the lease had expired, you may have a cause of action but I'll leave that to the opinion of an experienced O&G attorney.  I think it would be worth your time to solicit an opinion.

Permalink Reply by aaron naquin on June 15, 2022 at 20:42
Thanks for the help, the land the well is on we do not own, we are un leased not by choice, the well is in the section corner and we own the adjoining tracts where if they wanted to come back and go horizontal into the bulk of the section they would have to come under us, that’s why we wonder if that’s legal without signing us or our permission. We are getting a lot of contacts asking to buy our royalties and seeing more activity in area and would like to be prepared if they come in to drill again.
Permalink Reply by Skip Peel - Mineral Consultant on June 15, 2022 at 21:04

I suggest that you pursue some help to know where you stand and are prepared when the time comes for new wells.  You may be able to use your leverage to get an advantageous lease if that's what you want.  Otherwise you may wish to remain unleased and negotiate a sub-surface easement for future wells.  It may be better to broach this subject with Chesapeake before the fact.

Permalink Reply by ShaleGeo on June 16, 2022 at 8:53

The subject Haynesville well, CHK #1 Adams, continues to produce.  Cumulative production so far is 2.5 BCF.  Based on the 2011 completed well cost of just under $9MM, it may or may not have paid out with low gas prices.  You are "probably" and unleased mineral owner in this unit and have not received royalties yet due to being unleased.  This section WILL have many additional alternate unit wells drilled in it at some point in the future so you may want to negotiate a lease when the operator comes around next time.  Do not sell your royalties now.  I would pay a visit to a good O/G attorney in Shreveport in the near future.  

Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2022 at 9:03

I agree with jay that you are likely to have leverage in negotiating a lease if indeed a competent, experienced O&G attorney thinks you have a case for sub-surface trespass.  I know a mineral owner in a similar situation with the exception that a Haynesville well was being drilled when their lease expired.  This was a case where the surface location/well pad was not on the section being drilled and the well had not gone horizontal and penetrated the section to be produced.  That owner pointed this out to the operator and made an offer to enter a new lease with somewhat better terms than the one that had expired.  I'd rather be leased than be an unleased mineral owner.  If you do consider selling your mineral rights in the future, an advantageous lease will be important to maximize the value of your mineral right.  And if new wells are on the way, you'll get plenty of offers.

Permalink Reply by aaron naquin on June 16, 2022 at 9:23
Thanks for the help, think I will consult an attorney, any recommendations for one in Shreveport/Bossier?
Permalink Reply by ShaleGeo on June 16, 2022 at 9:37

Most that follow this board are fans of Randy Davidson who is in Shreveport.  I have not used him so I can not vouch but he seems to represent royalty owners more than industry.  That is the type of O&G attorney you need in my opinion.  I work in the industry but I am also a mineral owner.  

Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2022 at 9:40

Randy Davidson, Davidson Summers APLC, is my O&G attorney.  The firm has extensive experience dealing with Chesapeake.  It always helps when an operator knows your lawyers and has had experience dealing with them.

Permalink Reply by aaron naquin on June 16, 2022 at 21:27
Thank y’all for the help

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