Replies to This Discussion

Permalink Reply by Foxiecajun on July 24, 2008 at 6:35

If the well drilled in April 86 is still producing, the 10 years have not gone by without production. So the original mineral owner still owns all depths.

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Permalink Reply by Donny on July 24, 2008 at 10:10

The new well was drilled in December of 1986. The ten years passed in June of 1986

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Permalink Reply by Foxiecajun on July 24, 2008 at 12:34

Is it producing? You said the orginal was P/A in 86 and new one drilled in 86. Is is P/A too? and at what date?

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Permalink Reply by Donny on July 24, 2008 at 13:29

The well from 1955 to 1986 at a depth of 5500 feet is no longer producing. It was P&A in March of 1986. The O&G company wanted to drill to at a deeper depth, past the "Pugh Clause". To do this, they had to sign a new lease for the deeper depth. This lease was signed two months before the 10 year period (April 1986). The new well was drilled in December of 1986 (four months after the 10 year period). It is still producing today. The question is...if you sign a mineral lease that has a "Pugh Clause" to a specific depth (say 5500 ft.)...do you still retain the mineral rights (10 years after you sell the property) to what is below that specific depth (Say 7000 ft.)? After 10 years, (remember the deeper depth is not in production) would the original owner lose their mineral rights on the deeper depth because of the "Pugh Clause" in their original lease? If not, why sign a new lease in 1986? Wouldn't the lease from 1955 still be ineffect?

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Permalink Reply by P.G. on July 24, 2008 at 13:52

Two months before the 10 year period? Wasn't the well still producing up until about then (1986)?
Prescription is for how long there is no production, not how long someone owns a property.
Who was the new lease signed with?

If the mineral rights were held by production down to a depth, then I don't see why the new owner couldn't sign a lease for a deeper well.
It's a good question!
Hmmm?
Does any production at all hold all mineral rights or just the ones that's limited by the lease?

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Permalink Reply by Two Dogs, Pirate on July 24, 2008 at 14:46

Yes it holds all rights to China. My question is , were the mineral rights reserved in the 1976 sale of the property?

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Permalink Reply by Donny on July 24, 2008 at 15:31

No the mineral rights were not reserved... But does that matter, remember the 10 year rule.

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Permalink Reply by Two Dogs, Pirate on July 24, 2008 at 15:42

You ain't got nothing, crap, its gone in 1976. Ten years only comes into play when you reserve the minerals on a deed. If the transfer didn't reserve minerals then it sold with the deed, that is if the Grantor had them to begin with.

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Permalink Reply by P.G. on July 24, 2008 at 21:12

So if you sign a mineral lease with O&G company who produces a working well, and you receive royalties, then you sell the property without reserving mineral rights, does the lease and royalties automatically transfer to new property owner?

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Permalink Reply by Two Dogs, Pirate on July 25, 2008 at 10:55

Yes

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