Replies to This Discussion

Permalink Reply by full name 3 hours ago

I had the same problem several years ago.  The property was located on the edge of the section.  My lease said that the entire tract was leased but when Petrohawk set up the unitized section they left out a small sliver at the edge of the section.  Chesapeake picked it up in their unitized section.  Chesapeake claimed it was not under lease.  The area was small so I worked on it myself (no lawyer).  It took a few years but Chesapeake finally realized their mistake and helped me to get BP (bought from Petrohawk) to recognize their error.  BP now pays me based on my lease with them.

Take a close look at your lease and look at both surveys to see if something like this happened to you.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant 3 hours ago

The so called "Mother Hubbard" clause that is included in many standard form leases covers any owned mineral rights that are not covered in the legal description included in the lease but are located within the section leased.  Since you were not aware of any acreage not covered by your lease, you would have received no notice until an alternate unit well recovered its cost to drill and complete and then began to pay you your proportional share of unit production - less Lease Operating Expenses (LOE).  Have you tried to get a copy of the unit survey from SONRIS?  If not, use this link and make a copy.  Links do not last indefinitely.

https://sonlite.dnr.state.la.us/dnrservices/redirectUrl.jsp?dDocnam...

• ▶ Reply

Permalink Reply by Les 1 hour ago

Thanks to both of you for your comments and the helpful link. I should have gone to SONRIS before my posting as I now see this is a different lot than I assumed it was. This l-acre lot has never had a mineral lease, nor had we ever received any royalties from it. Also, we own no other property/mineral leases in that section and the property was somehow overlooked in the succession and is still held in my deceased mother's name. I was surprised there was no effort to get this lot under lease at some point. I presume there is no need for a lease now as I guess by default we have a working interest in the well and will continue to receive royalties after all our apportioned expenses are paid.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant 1 hour ago

Nope, unleased tracts are covered in the mineral code as Unleased Mineral Owners (UMOs), not Working Interests (WI).  Different rules and regulations apply.  The lawsuit on the post production costs assessed against UMOs versus those assessed against leased minerals by HA operators is ongoing.  The most recent court ruling by the state supreme court was a partial win for the UMOs.  A final legal decision may be some months, if not years off.  The industry is fighting it tooth and nail because if they lose, all operators in the state who have taken illegal deductions will lose.  And UMOs will recoup some hundreds of millions of dollars.

• ▶ Reply