Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on November 25, 2011 at 4:42

The lease remains in effect regardless of who owns the mineral estate. Conveyance of minerals by deed, donation or prescription does not negate a legally binding oil, gas & mineral lease.

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Permalink Reply by James on November 25, 2011 at 4:52

One more question:  Who will get the royalties ? Am I correct that MO1 now owns the rights and will receive the royalties since there was no producing well when MO2's 10 year ownership expired even though MO2 signed the lease ?  Thanks!

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Permalink Reply by Skip Peel - Mineral Consultant on November 25, 2011 at 6:17

Prescription is interrupted by a good faith effort to produce, not just by actual production. If a well was drilled on the servitude or in a unit in which the servitude is pooled that would serve to reset the ten year clock even if was dry and plugged or plugged and abandoned.  If there was no well drilled during the prescriptive period the owner of the surface now owns those mineral acres and would receive the royalies.  It is always a good idea to notice the operator of the well/unit that minerals have precribed to you and send a copy of the instrument which created the servitude. 

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Permalink Reply by James on November 25, 2011 at 6:43

As far as I know, there is no well in that section (T8N-S15-R12W) and If I'm interpreting it correctly, it was pooled with T8N-S12-R12W (seems odd the 2 sections are not contiguous).  However, I think a well has was permitted in the other section either in Oct or Nov.  I really do appreciate your replies and the very educational information.....Thanks

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Permalink Reply by The_Baron on November 28, 2011 at 6:02

no they are not pooled togetther. different fields.

 

Section 10 has a well (surface in sec 3), but 15 does not as of yet.

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Permalink Reply by James on December 4, 2011 at 15:52

Here's the map that led me to believe that sections 15 & 12 were pooled.  They are both labeled HA RA SU W so I just assumed they were.

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• IMG_0001.jpg, 4.1 MB
• IMG_0002.jpg, 172 KB

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Permalink Reply by Skip Peel - Mineral Consultant on December 4, 2011 at 16:05

As The Baron states, the two are not pooled together.  Section 12 is HA RA Sand Unit W in the San Miguel Field and Section 15 is HA RA Sand Unit W in the Zwolle Field. 

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Permalink Reply by James on December 4, 2011 at 16:11

OK thanks, I don't really know much about it but I'm learning more everyday thanks to all the replies.  I really appreciate the help !!!

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Permalink Reply by Skip Peel - Mineral Consultant on November 25, 2011 at 8:01

Many horizontal wells are drilled from an adjacent section. That and the fact that SONRIS organizes wells by the section where the well pad is located means you have to pay attention to the section with the bottom hole location as that is the one being produced.  If a well was spud before the servitude reached it's expiration date then the servitude is still in effect even though the well has not been completed.

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Permalink Reply by James on November 25, 2011 at 9:22

Looked at SONRIS and didn't see any wells in adjacent sections on all four sides so I should be in good shape.  Thanks

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Permalink Reply by The_Baron on November 28, 2011 at 4:55

There has been some debate aboutwhat happens to the prescription whan a well has a surface location outside of the unit boundries.

 

There is no specific case law and the mineral code is lacking in dealing with horizontal drilling. But it has been suggested that  presscription may not be interupted until the well bore actually penatrates the unit boundry. Others say that the spud date is all taht matters.

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Permalink Reply by Skip Peel - Mineral Consultant on November 28, 2011 at 5:20

Baron, I am aware of one case where a horizontal well spud in an adjacent section prior to lease expiration but the lateral did not penetrate the section to be produced until after the expiration date.  The mineral owner pointed this out to the operator and offered to sign a new lease with slightly better language and a modest bonus.  The operator accepted. 

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