A legal issue

Our leased will run out on the 10th of this month for one section. We hold leases in three sections. The COMPANY madeLease an offer to extend the lease for a year. They were willing to pay an amount per acre that we thought was fair but they would only give us 22.5%. The original lease was for $100 per acre and 20%. The company refused to go to 25% and withdrew their offer. Last Tuesday, they moved their rig to another section 10 across from the one the lease will run out, section 3. They had started drilling with a legal permit on section 10 last Oct. then pulled out. Now they want to use that hole to drill into three. They do NOT have a permit to drill into 3 yet. My question is: Legally can this be done?

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Permalink Reply by The_Baron on May 7, 2010 at 4:24
Sometimes with a drilling permit, an operator will get word from the district that the permit has been approved and sent to Baton Rouge for final review and approval. Rarely will a permit be denied by Baton Rouge as the district has already done the main work and Baton Rouge is more of an aministrative oversight. While you can't start drilling until the permit is approved by Baton Rouge and a serial # is assigned, a time strapped operator will go ahead and start moving in so they can spud as soon as the permit is approved.

Also, you are right Mac, SONRIS can lag behind.

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