Everyone doesn’t sighn a gas lease on the same day . If one lease expires in the unit that you are in does that cancel the whole unit ?

Views: 785

Reply to This

Replies to This Discussion

Usually, you’re not unitized unless the well/s are in production. If you’re in production, your lease is into the production phase. It doesn’t end until production has ended. 

We are not drilled yet lease expires next may if it expires is the whole pooled unit void?

William, a unit will not void over a lease expiring. Once a operator files a DEP permit and it’s approved and then a DPU is filed in the courthouse, all the drilling operator has to do is start the casing pipe and the unit is in effect and holds all leases. 

Attachments:

Ok thanks I can’t see the oil & gas company paying out bonus money 2 times and not drilling time will tell .

If you had a capable oil and gas attorney negotiate your lease, most likely he will have spelled out what your situation is. 

What we’ve been told, and have experienced is that the gas companies will plan their activity around the end of the first term so as not to have to pay the bonus again, political issues aside. Being that there is a war on production, that might accelerate their plans….or scuttle them. Scary times right now. 

One expired lease does not a unit cancel.  Here's why.

The oil and gas rights that you own are real property, just like a house or a plot of land.  You can wheel and deal on your piece of property without directly affecting the other pieces of property around you.  If you were the first person to sign a lease, then usually (assuming everyone signs leases with the same primary term) your lease will be the first to expire.  The leases on all the other pieces of property are still in force.  The unit is built on many leases.  The only thing that is likely to happen in this situation is that the company will renew the lease, either using automatic extension language if the lease included that, or by renegotiating a lease with you.  If for some reason your lease were to expire you could probably sue them for trespass, so they are very motivated to make sure your lease does not expire. 

It's very likely that your lease will not expire, though.  Most leases include language (others have posted examples in this thread) that makes it so the lease will not expire if the property is being operated in the search for or production of oil and gas.  The company will argue that putting your property in a unit is operating in the search for oil and gas.  Whether this is the case in your state is a question for an oil and gas attorney from your state.

Thanks for the good info 

Believe it, this happened to me.

At the end of second term Shell surrendered my lease…

RSS

© 2021   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service