Lease due

Our lease is up in Oct with Cabot.  They are now pulling out gas on 1/3 of our property.  They say, since the property is now producing, they don't have to pay any more for our land.  Just, of course  royalties   Is this possible?  Do they have our land forever?  And how about the other 2/3's that's not producing.  Doesn't that need to be leased, from us?  Thank for any info

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Permalink Reply by Hunter on April 9, 2013 at 11:06am
Do you have a Pugh clause?
Permalink Reply by Michael Moore on April 9, 2013 at 11:15am

We are aware of this clause, but can not see it on our lease.  There is a paragraph, vaguely, addressing this, but it is not clear.  Is it possible for Cabot to do this?

Permalink Reply by evan on April 9, 2013 at 11:36am

yes its possible if you dont have a pugh clause.

Permalink Reply by Mark McGrail on April 9, 2013 at 11:35am

Michael,

Is your lease for all of the property or just the 1/3 ?

If you don't have a Pugh clause yes it's possible.

They have your land for as long as there is production.

Is the 2/3 that isn't producing under lease?

Your lease may have a PUGH clause or a pooling/unitization clause. These clauses will state (in general) that all land has to be used, any land not used reverts to the Lessor after the primary term or any extension etc.

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