Does allowing seismic testing hold a lease?

I am just wondering if allowing seismic testing will hold your lease even if they have not drilled yet when the lease expires?

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Permalink Reply by craig on November 15, 2011 at 9:43am

Unfortunately, I've seen leases that could allow this I believe.

Permalink Reply by Jack Straw on November 16, 2011 at 6:55am

Jim,

      I am afraid that the answer to your question lies within the verbiage of your lease.

To know the answer, you should consult an Attorney with O&G lease expertise.

If you have been approached by a seismic acquisition contractor regarding their entering upon your property for the purpose of recording seismic data - then there should be some form of compensation.

I would suggest that the seismic acquisition contractor should be required to pay the full costs of your consulting an Attorney for the purpose of determining an answer to your question. The seismic acquisition contractor should understand that your agreement to allow them to proceed is conditional upon receiving suitable assurances from your Attorney that your rights are protected.

My personal opinion is that allowing a seismic contractor to obtain seismic data in your area is likely to ultimately be to the benefit of all. However, you deserve assurances w.r.t. your lease and you deserve compensation for allowing them limited right of access and you deserve payment for surface disturbance/damages.

All in my humble opinion.

One size fits most.

Consider this free information to be worth every penny you paid for it.

 

JS

 

Permalink Reply by Finnbear on November 17, 2011 at 5:19am

What does the lease in question say? This is the ONLY way to determine the answer to your question.

Permalink Reply by Tracy Packer on November 18, 2011 at 8:10am

seismic is normally a different deal than you mineral lease. They will pay the surface owner to do seismic testing. If the mineral owner and the surface owner are the same.......no need to worry. But......at least in Texas. The mineral owner does supersede over the surface owner and can get the seismic testing whether the surface owner agrees or not to have the testing. The testing is not a big deal at all and it doesn't take much time either. I hope I helped with your questions just a lil bit. I know laws are diff in every state.......not sure if y'all have the same rules.

 

Have a great one!!

Permalink Reply by Finnbear on November 18, 2011 at 8:32am
Only the language contained in your lease can determine what activity can hold your lease. You need to determine what your lease defines/specifies as activity that can be used to consider the lease as Held By Production.
Permalink Reply by Jim Pollock on November 19, 2011 at 2:11am

Here is the wording in my lease and I feel that this would cause seismic to hold my lease. What do you guys think?

 

This lease shall continue beyond the primary term as to the entirety of the leasehold if any of the following is satisfied:

 operations are conducted on the Leasehold or lands pooled/unitized therewith in search of oil, gas or their constituents

Permalink Reply by Jack Straw on November 19, 2011 at 4:28am

Seismic data could be expected to image the top and bottom of the Marcellus Shale.

Seismic data could be expected to image any signifiant faulting or any structuring affecting the Marcellus Shale.

Seismic data could be expected to allow one to calculate depth to and thickness of the Marcellus Shale.

It is known that the Marcellus Shale contains "oil, gas or their constituents".

The argument could certainly be made that the acquisition of seismic data (through its imaging of the Marcellus Shale) is an operation that assists in the "search of oil, gas or their constituents".

The argument could certainly be made that the acquisition of seismic data would allow the lease to "continue beyond the primary term as to the entirety of the leasehold".

Different people might differ in their opinion as to whether the acquisition of seismic data would allow the lease to "continue beyond the primary term as to the entirety of the leasehold"; it is a sticky situation.

There are a lot of "Gotchyas" written into the standard "boilerplate" lease.

None of the above should substitute for the legal opinion of an Attorney experienced in O&G law.

Just my humble opinion.

One size fits most.

Consider this free information to be worth every penny you paid for it.

 

JS

Permalink Reply by Finnbear on November 20, 2011 at 8:01pm

I'd bet a steak dinner that the O&G considers running seismic to be within the scope of "operations are conducted on the Leasehold or lands pooled/unitized therewith in search of oil, gas or their constituents".

Permalink Reply by Steven A. Walton on November 21, 2011 at 11:21am

Is this Jim P from Duq evening division?

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