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Permalink Reply by Mike Murphy on December 22, 2015 at 10:57am

HAD MINE RENEWED IN Marshall county on the Wetzel county line about 21 days before it expired. What is the date for your lease to expirer?

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Permalink Reply by Howard W Hatcher Jr on December 22, 2015 at 2:23pm

Part of my property is in a well site but the other half of the acreage isn't.
The lease expired 12/21/15

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Permalink Reply by rmc on December 22, 2015 at 2:47pm

I guess you have a Pugh clause ?

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Permalink Reply by Christian E. Turak on December 29, 2015 at 3:38pm

I know of several leases being renewed by SWN in Ohio County.  They have a dominant position in Ohio County due to CHK's aggressiveness there over the last few years.  From my experience, the only leases that are not renewed are leases which have landowner-friendly royalty provisions (i.e. 18% true gross or above) and a substantial per acre extension payment due.  The thinking is--as far as I can tell---is that SWN will let these leases lapse with the idea that no other company will be interested in leasing it due to SWN's position in the county.  SWN can then release at more industry-friendly terms.  

To the point below by rmc, if only a portion of your acreage is already included in a unit, it is likely that it the entire acreage is held by production.  In that event, SWN would not have to extend the lease or take any further action to hold the lease and the entire acreage.  The exception to this is if your lease had a (horizontal) Pugh clause which states that any acreage not included in a unit would either have to be included in a unit or extended in order for it to be held under the lease.  

On an unrelated note, a vertical Pugh clause would state that any strata/shale not being produced at the time of end of the lease would be free to release (unless extended).  That is to say that if SWN is producing the Marcellus, you could go ahead and release the Utica (or any other strata) upon expiration of the lease.  

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Permalink Reply by Howard W Hatcher Jr on December 31, 2015 at 2:39am

Thank you for this information. I think you are spot on, as I do have the higher re-lease option. I sent SWN an email last week with no response yet!

As always it's a waiting game.

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Permalink Reply by Barry D on December 31, 2015 at 2:56am

Howard,

As Christian stated, unless there is a "Horizontal Pugh" clause in the lease then all of the property covered by the lease is probably HBP. In that case the company does not need to renew the lease. (My armchair attorney opinion)

Is there a Horizontal Pugh clause in your lease ?

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Permalink Reply by Howard W Hatcher Jr on January 1, 2016 at 5:07am

after re-reading my lease, no there is no" Pugh" clause in my lease.

Happy New Year to All !!!!

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