Sonris shows a drilling status for a rig in 25-9N-13W drilling into 24-9N-13W as of 5/23/2011.
My question is, if my lease in sect. 25 runs out does this rig being situated on 25 tie up my lease even though its drilling into Sec. 24. Also, once a lease expires is there any grace after the date the lease was originally signed or is it expired as of the date it was signed.
The sonris data seem strange to me. The surface location is listed as being in Sec 25. But under the scout info, it seems to say the surface is in Sec 13. That confuses me.
The answer to your question is this: If you own land in Sec 25, and the rig that is situated in Sec 25 is for draining Sec 24, then that rig should not hold your lease.
And, there is no grace. If drilling hasn't started, the lease ends at the end of the primary term.
The original permit issued was to drill from section 13 south into 24. There was an amended permit changing the surface location from 13 to 25. They are drilling north into 24 now. Thats also why the name was changed from the Wright Family to Meriwether.
Ahhh... just a minor correction. It's just the pedant in me, but ALL lawyers are pedants. The word "started" may be construed by an oil company's lawyers very loosely indeed.
The statement "... If drilling hasn't started, the lease ends at the end of the primary term. ..." may not be correct. MUCH depends on how the lease is written and worded. Unless the lease contains a clause which *specifies* that a well must be spudded in to hold the lease beyond the original term without production, it may not be true. Some scummier ah, "less reputable" oil companies have leases which use terms like "operations for drilling", which might possibly be construed to include such activities as cutting trees, building a road, building a pad, etc.
I think that the rest of your advice is "spot on"!
So true. In fact, some leases even require that a rig capable of drilling the entire well be actually drilling to hold the lease. This prevents the operator from bringing in a smaller rig to drill the first few thousand feet, thus holding the lease, and then waiting many months to bring in the larger rig to complete the well. My lease has these words:
"...commencement of operations” shall be presumed to be the date LESSEE commences actually drilling with rotary drilling tools of a suitable size necessary to reach the objective depth...
That is an excellent clause. I think mine is good, but yours is much better.
Advance Notice: any other lease I sign will include YOUR wording. My teachers reviled plagiarism, but they aren't grading me now.
That looks like an excellent clause to have.....would you send me a PM, dumb me can not seem to get one to send/work on my computer.