What happens to a lease if company goes bankrupt after drilling?
What would happen to a lease that was due to expire if the well had been drilled, but was never completed or set to production. The company that drilled the well then goes bankrupt, without ever pumping 1 cent of gas out of the well. What then becomes of the lease?
Thanks.
Thanks.
Views: 87
Replies to This Discussion
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Permalink Reply by The_Baron on -
your thinking to hard KB/wolf. If the well is not producing it is pretty clear cut.
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Permalink Reply by The_Baron on
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The lease is only held after the primary if one of the following occur:
1) well is producing, lease is Held By Production (HBP)
2) Well is capable of producing, shown by a succesful test. If it is not activly producing though, shut in rentals must be paid.
3) Lease is extended.
If these do not occur, the lease expires.
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Permalink Reply by The_Baron on
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http://www.utcle.org/eLibrary/preview.php?asset_file_id=14046
Its for Texas, but it may help.
http://www.docstoc.com/docs/2676267/BANKRUPTCY-ISSUES-IN-OIL-AND-GAS
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