landowner

Will Temp P&A hold lease on well that was never completed?

Will a lease expire under the following conditions.  If a pad is built and a well has begun to be drilled but never completed.  Last update in Sonris from 02/28/2011 shows well status is "07".  The note says "DRILLING; STUCK PIPE; TEMP P&A".   The rig has been gone since that date with no activity.  Lease expires at the end of August.  If drilling does not resume by the end of the primary lease term (end of August) would the lease end or require an extention?  There is a two year option written in the lease.   The same company continues to drill and permit wells in adjacent sections.

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Oil & Gas ProPermalink Reply by Yogi Bear on July 17, 2011 at 11:19
You've answered your own question. Assuming there is no production or further intent to produce, then if the company wishes to maintain the lease, it must exercise the option. TA just means they are not prepared to plug and abandon - unless there are ongoing attempts to establish production within the continuous operations provisions or provisions at the end of the primary term, the lease cannot be maintained no matter what the status says.

Oil & Gas ProPermalink Reply by The_Baron on July 18, 2011 at 3:02
Not nessasarily, depending on the lease, it could be maintainedwith the Shut-in provisions.

Oil & Gas ProPermalink Reply by Yogi Bear on July 18, 2011 at 10:13

The topic states that the well was never completed. Shut in would not apply because the well would have to be capapble of production in order to be shut in.

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