Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2010 at 14:31

Don't get too caught up in the exact time that your lease term expires unless there is a rig setting up as we speak. Check well permits. If there is not one already issued for your location, it's most likely too late. Your lease (unless other than a standard form) is terminated at 12:01 am on Feb. 25, 2010. Setting up a rig or any other prep activity should not count. The bit must hit the ground. Your next step should be to secure a written release which should be filed of record with your county Clerk of Court. adabu, very few get the opportunity to sign a new lease after learning as much as you have here on GHS. I am sure you will take full advantage of the opportunity. Good Luck. And when you execute a lease that is acceptable, please consider making a donation to GHS. Skip

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Permalink Reply by adubu on February 20, 2010 at 14:54

Thanks Skip Peel---they do have approved permit from RRC already. Pad site has been constructed, but rig not there yet. You told me what I had thought was correct that the bit must hit the ground before 12:01(wanted comfirmation-thanks) In general in your experience what the avg time to move a rig (~1000hp for vertical hole) in place and spud hole?

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Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2010 at 15:07

adubu. That question is beyond my ability to answer. A smaller rig may be used to drill the vertical portion of the wellbore. And one may be moved on site and rigged up in a relatively short time. I got my fingers crossed for ya.

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Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2010 at 15:41

You're probably right but I would suggest getting some stills or video with some witnesses if it comes down to the deadline. Unfortunately we can not rewind and do-over. But we can go forward with improved knowledge. And communication. I suspect your opportunity to manage your minerals are not done.

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Permalink Reply by DJG on February 20, 2010 at 15:50

Adubu,

In your current lease is there a definition of what is considered "operations"?

If it is there, it is likely to be directly after the wording detailing the length of the primary term of your original agreement. I've seen these worded such that even a survey, or preperation of a road or pad site can be considered "operations". If there is such wording in your current contract then the fact that the pad site is already constructed might, unfortunately, mean that the current contract stands.

Hopefully no such wording is in your current lease and hopefully they'll have some delays and not get the drill in the dirt by Thursday morning.

Keep us posted on the developments and good luck either way.

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Permalink Reply by adubu on February 20, 2010 at 16:13

the lease has one possible catch phase ......extention of lease past primary terms --."any other operation reasonably calculated to obtain production" However I can't see building pad site or rigging up can independently obtain production must have bit drilling into ground. Skip how do you read this?????

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Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2010 at 16:44

Without a copy of the lease, I would be guessing. However, in the majority of standard lease forms I am familiar with the bit has to hit the ground.

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Permalink Reply by The_Baron on February 23, 2010 at 11:13

In the past, courts have held that without very specific language to limit the definition of operations that site prep can constitute operations and hold a lease.

If you arre on a standard lease with no admentments, building a location, constructing pits could constitute operations. These operstions would need to be conducted in a manner that constituted a continuous operation.

In short, if you were in a situation where an operator is claiming the lease is held by operations, and you did not agree, you would have to sue to have the lease broken. Few companies would be willing to lease you with this kind of a cloud on your title.

It is hard to say what operations would hold your lease without reveiwing the lease and the paticular circamstances of the operations involved.

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Permalink Reply by RBH on February 23, 2010 at 12:06

why do you want to BUST your lease as drilling is so close? Are you looking to be a participating working interest partner??

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Permalink Reply by adubu on February 23, 2010 at 14:02

want higher % royalty 1/4 rather than 3/16 and better terms,etc but looks like that will not happen rig moved on site today

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