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Permalink Reply by Spring Branch,mineral owner on February 13, 2010 at 8:51

At the time all production ends as stated in #3 above, the 10 year prescription clock begins. If new production is established during the 10 year period, the new production elminates the 10 year prescription clock and holds off prescription as long as there is production. When the production ceases again, a new 10 year prescription clock is started. Remember that prescription is related to mineral ownership, not an oil and gas lease.

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Permalink Reply by Mac Davis on February 13, 2010 at 9:58

Thanks, but I'm still confused.

Are you saying that if production stops after the term of the initial lease, the lease expires and they won't be able to drill another well under that lease?

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Permalink Reply by Spring Branch,mineral owner on February 13, 2010 at 11:06

I'm saying that the lease expires when it expires and is certainly no longer valid if production ceases after the primary term plus extensions.

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Permalink Reply by P.G. on February 13, 2010 at 11:28

So does that mean that prescription only applies to the well drilled while the lease was valid?
If say the original well was p/a'd and the lease plus extensions expired and then someone else came in and drilled a new well only a couple of years later. Would the new well driller have to get a new lease from the MO?

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Permalink Reply by P.G. on February 15, 2010 at 3:12

Would it be safe to assume the MO would only be HBP to wells drilled and active while leased? Any quiet period between when wells were abandoned and new wells drilled would sever obligations?

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Permalink Reply by Spring Branch,mineral owner on February 15, 2010 at 4:08

If the original well was p/a'd after the primary term plus extensions and no subsequent well was drilled and produced before the "original" well was p/a'd, then there is no longer a valid lease and "someone" can't just come in and drill a well without buying a lease from you. Remember that in the case of a mineral servitude, drilling a well starts the ten year prescription clock over again, whether production is established or not. If one owns royalty, but not a mineral servitude, it takes actual production to restart the prescription clock.

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