Can you lease Mercellus and Utica rights seperately?

I was just wondering if you could lease out your Mercellus rights, and then get another signing bonus by leasing out your Utica rights later, or to someone else.

Or is it structured so that you have to lease all of your rights on the initial lease?

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Permalink Reply by Jack Straw on December 4, 2011 at 8:52am

Yes, you could.

You could have verbiage inserted such that you were leasing from the surface to 500 feet below the base of the Marcellus Shale Formation.

Subsequently, you could in the future lease with verbiage inserted such that you were leasing from the 501 feet below the base of the Marcellus Shale Formation to 500 feet below the base of the Utica Formation.

The biggest problem would be finding an O&G operator prepared to accept such limits; their preference is to lease from the surface to the center of the Earth.

Also, if you were to place such a restriction in the lease, the Lessee would likely wish to pay a smaller up front bonus and perhaps a smaller royalty percentage.

It makes sense to give it a try.

 

All in my humble opinion.

One size fits most.

 

JS

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