What's required to be HBP in PA?

Hi everyone,

The initial term of my lease will be up in August and the last word from Southwestern was that my unit wasn't on the drilling schedule until sometime in Oct-December. So my question is this: Does anyone know what's required by law to be held by production?

The easy answer is that they'd be producing gas but there are horror stories on here about companies claiming that any activity like parking a bulldozer on the property was good enough. Chances are good that at least the pad will be in place when the lease expires due to the timeline being so close...is that enough?

I searched the website a bit but you can imagine the hits from "HBP". :) Any help would be a appreciated. 

Thanks,

Mud

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Permalink Reply by Jack Straw on January 10, 2013 at 6:41am

You need to consult your lease for the answer.

There should be some verbiage that answers your question; warning, the language may be quite vague or ambiguous (by design).

 

Clearing for a pad might possibly be sufficient; again, the answer likely lies in the specific language contained within your individual  lease.

 

All IMHO,

               JS

Permalink Reply by Mud on January 10, 2013 at 7:26am

Of course. Thanks Jack.

Under Terms of Lease it says: "This lease shall be in force for a primary term of 5 years from the  effective date, and as long thereafter as oil or gas or other substances covered by this lease are produced from the lease premises or from lands pooled with the lease premises, or this lease is maintained in force pursuant to any of its other provisions."

There is no other wording in the contract addressing that issue. Seems pretty clear actually. Maybe I'll get lucky and they'll have to renew.

Permalink Reply by Finnbear on January 10, 2013 at 3:09pm

The key here is in the following:

"or this lease is maintained in force pursuant to any of its other provisions"

Without reading the rest of the lease we cannot know what "other provisions" are included in it.

Permalink Reply by John Harrison on January 11, 2013 at 8:14am

You should check to see if you are in a unit declared at your county courthouse.  You won't be notified if you have been included, but searching in Landex.com will show you if you are.  In Bradford Conty, Chesapeake is making four units for each well pad.  The Felter and Marryall well pads have four units each with about 2000 acres tied up for each well pad.  Since no one but the gas companies sets the rules for how units are formed it is almost impossible to not be held by production if you are in an area with much drilling.

Permalink Reply by Mud on January 11, 2013 at 10:41am

So I gave SWN a call and asked a few questions. The gentleman I spoke with was very helpful. My property has not been unitized and the drilling is scheduled to be completed after my lease is up. So i was hopeful until he referred to the operations clause which I had missed. As long as they are drilling within 90 days of the end of the lease they don't need to renew. So yeah, it's very unlikely. So close. :)

Thanks for the help gentlemen.

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