HBP in Pennsylvania? - Or Not!

Lease signed by my parents in 1977 listing two parcels of land 1/2 mile apart. Parcel 1 is 82 acres and parcel 2 is 70 acres. In ~1981, parcel 1 was placed in two separate units ( to the exact tenth of an acre ) and drilled. Since then, a total of two shalow wells have been drilled in one of those units and three in the other ( one on my parents property ).

 

Parcel 2 was never touched and has been leased and released from lease since ( by a different co. ).

 

The long and short of it is --- CAN AN O&G COMPANY HBP PARCEL 2 WITH THE ACTIVITY ON PARCEL 1 EVEN IF ITS 1/2 MILE AWAY!

THE CO. TELLS ME THEY CAN AND DO!!!!!!!!!!!

Any input welcome. thank you.

 

PEED OFF!!!!

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Permalink Reply by Jack Straw on April 30, 2013 at 7:10am

I suggest spending $200-$400 to have a Qualified, Experienced O&G Attorney carefully read over the lease and any subsequent Amendments or Modifications.

To save money, if you do not have these documents; go to the respective County Courthouse and obtain prior to engaging Attorney.

I do not believe that your question can be answered without careful review of the existing documentation.

I do believe that it is worth pursuing.

 

All IMHO,

                JS   

Permalink Reply by Mike C. on April 30, 2013 at 7:18am

yes

Permalink Reply by Whites on April 30, 2013 at 8:04am

Of course they can hold both parcels if they're on the same lease.

Unless you have a pugh clause that states anything not in production after a certain time will be released.

Permalink Reply by Jim Litwinowicz on April 30, 2013 at 8:16am

Short answer, yes.  If you own more than one parcel always insist on signing different lease for each one. And/or having a solid Pugh Clause.

But in your case, you stated that the lease for the second parcel was assigned to a different company, which later released that parcel from the lease.  If I understood your post correctly, you should be able to lease the second parcel. 

 I am not an attorney but that is how I understand it. You need a good O & G attorney to handle this.

Good luck

Permalink Reply by Jack Straw on April 30, 2013 at 8:22am

RE: “Of course they can hold both parcels if they're on the same lease.

Not necessarily; there can be some grey areas.

One of these grey areas might be associated with implied covenants.

 

Do a Google Search on: “Implied Covenant of Further Exploration”, and “Implied Covenant to Further Develop”

 

PA is behind some other states in dealing with such issues; however, at some point in the future the PA courts will have to look closely at the implied covenants.

 

All IMHO,

                   JS

Permalink Reply by petej on May 6, 2013 at 3:58am

Thanks to all for the input.

I have made copies of all documentation and is currently under review by an attorney. I used input from GMS and local attorney references and settled on who we believe to be qualified and experienced in Pittsburgh. We live in NW PA.

Have to wonder........how this was presented to my parents? They did fairly well for themselves as a working class family - made a lot of smart decisions. Can not believe they would have signed knowing this situation could happen. When they sold us the property I know they believed it was not under lease.

Well, we shall see how it goes. Thanks again all.

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