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Permalink Reply by Seimond S Evans on May 19, 2014 at 9:31

I mean LAND MAN

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Permalink Reply by jim weyland on May 19, 2014 at 10:09

seimond,

not trying to be or sound like a smart_ss, but shallow is generally understood to be the opposite of deep. 

over the many years drilling technology has advanced. allowing the drilling of deeper and deeper wells.

and, over the years, almost all shallow oil/gas deposits have already been found and produced.

those/any shallow oil/gas deposits that remain un-drilled tend to be marginal.

the most important thing about finding oil/gas exploration that my grandfather told me was: jim, the best place to find oil/gas is where you've found it before but just at deeper depths.

my point being, even if today the land in question has had shallow opportunities, it doesn't mean that deeper,potentially way more productive prospects for oil/gas doesn't lie at deeper depths

good luck,

jim

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Permalink Reply by Dion Warr, CPL on May 19, 2014 at 11:28

Seimond:

I feel like I may be missing of a bit of context - were you told this in connection with an attempt to lease your property, or by way of explanation as to why your property would not or could not be leased for deeper depths?

The reason that I ask is that in many cases, operations and/or production from shallow wells can serve to hold old leases, which in many cases did not contain Pugh clauses or stratigraphic provisions (either leasing only shallow depths in the first place, or calling for releases of all unexplored deeper depths at a certain point in time after the primary term has expired). In such examples, the shallow operations hold the leased properties under contract such that the lands are not available to lease or payments due on said leases can be much lower than more recently drafted agreements. This happened quite often in the early HS area in that older producing fields which were scattered within the fairway held old leases which resulted in landowners not receiving major perks availed to unleased parties (e.g., higher bonuses, higher royalties, other preferred lease terms).

Could you share some details as to how this came up in your situation?

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