landowner

s6-t13n-r8w

Hi, We have just received notice that a new well is going to be drilled on our plot of land.

If I am correct I think it's s6-t13n-r8w.  There is an existing well producing oil/gas.

The sonlite page has the well listed.

The numbers have been horrid to say the least. 7y 7m of production for 971 BBL of oil, and 37.7k MCF of gas.

On top of that they missed paying some people for a few years, but the royalty cheques didnt cost them much in the form of catching up.

 

I have a couple of questions however. 

Since the original lease was not for Fracture Mining then will the 10 year rule extend the existing lease to allow them to do any form of mining? (specifically, Fracture Mining).

 

The Royalty rate is 1/6th.  I have some issues with this because the land owner (my family) asked the landman if they could offer a better deal than 1/5th... He said he could do a lot better, 1/6th.. He was asked if that was more overall and answered yes.  While the person in question competent/of sound mind.  Their math ability has been completly shattered due to brain injury.  This lease is now 8 years old, would the family still have recourse?

 

Dzurik stated (when the shale was first big in the news) that they would not be developing this well for us, they would continue with the existing well. 

They have now sold the rights forward to another company now (I dont have the details onhand) and the new company will do the production.  I think the contract states that we must pay for all production cost, including treatment of the product.  If they have sub-contracted the mineral rights then can they still charge for these values?.  And can they charge for things such as "Administration"?

 

Thanks for your time.

Regards J

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Replies to This Discussion


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on October 11, 2011 at 12:18
You have probably received a pre-conference notice letter for a unit application.  It's not a well.  It's an application to force pool all the mineral interests within the proposed unit boundary for a specific formation or zone described in the notice.  Regulations require that the applicant send the notice letters to mineral and surface interests of record within the unit boundary and to those immediately adjacent to a distance of 1000'.  Note the section, sections or partial section within the dashed line that marks the unit boundary.  The existing well you mention is holding in force the lease(s) covering all the minerals contained in that Hosston drilling unit (HOSS RA SUL).  A lease confers development rights regardless of how the wells are drilled or completed.  There is no 10 year rule for producing leases that is for the prescription of undeveloped mineral servitudes.  Assuming that Dzurik is the lessee and/or operator, they can assign their deep rights to another operator barring any specific language that limits the depths covered in the lease.  It doesn't matter what company drills the new well, they must abide by the terms of your existing lease.

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