If a Haynesville Shale section has no production for some time and now leases signed years ago begin to be no longer enforceable due to no production....what happens if several different companies begin signing new lease agreements with mineral owners in that section?  For a simplified example: old leases = 10 mineral rights owners in the section with one company. All signed leases with same company.  New leases = 10 mineral rights owners signed  with 4 potential companies. (4 different companies). How do the 4 decide who is the new operator in the section (unit)?  This is a hypothetical situation.

 Also what is the official document that determines when gas production stopped (clock starts)?

 

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The question is: has the original lessee terminated the lease.  Non production does not necessarily require this as far as I know.  Sometimes lessors demand that a lease be terminated for non-production.  That is a legal question.

Other than the terms of the lease (royalty, bonus, no cost clause, etc.) it doesn't matter who you sign with the operator of the wells must abide by the terms of the lease.

If this ceases to be hypothetical:  Contact an experienced O&G attorney.

Jed:

Skip offers good advice. It's always wise to get a landowner-friendly O&G lawyer.

Now, if I owned minerals/land in the section you're referencing . . . I would NEGOTIATE the best deal I could get (per a lawyer) . . . with the landman who represents the gorilla operator that's most likely to spud. In other words, go with the big gorilla. Sign with the operator who's going to drill the section, who's going to send you mailbox money each and every month.

In other words, I prefer to avoid the non-drillers . . . if at all possible.

That said, in this case . . . even a good deal with a non-driller would probably be okay, too. Just make sure they're muscular and aren't a flaky fly-by-night headache b.s. operation.

And this should be fairly easy to figure out. A good O&G lawyer would know who's who and what's what.

In the past, I've used the Davidson lawyer firm in Shreveport, i.e., I also like Skip's go-to recommendation for such stuff.

 

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