Can a Gas company own you after being leased and released?

We have 166 acres in Belmont county, we had 18 acres drilled about 8 or 9 years ago. Our 2nd lease should expire this December, a call to the company inquiring if they were going to renew the lease, was met with the comment "We own you"

What!!!!!

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Permalink Reply by Nancy Mosley on August 18, 2022 at 5:11am

It sounds like they mean you are "held by production". Many leases have terms that say if a well is drilled, or even commenced, that holds the lease as long as [whatever the terms say, maybe "as long as oil and/or gas are produced" or "as long as operations continue"]. Since there is a well drilled, that probably fits the terms of the lease to hold it.  See if you can find your lease and read the wording. I am NOT a lawyer but have read a lot about lease language.

Permalink Reply by KB on August 18, 2022 at 5:13am

First advice is to have a lawyer to review the lease.   If your acreage is continuous with the 18 drilled acres, then the answer will depend on the lease agreement, but I would say it is likely your acreage is now held by production.  But I am no lawyer.  Look for a Pugh clause in your lease and research that.

Permalink Reply by James M Stephens on August 18, 2022 at 5:18am

Certainly the 18 acres are held by production, the rest has not been drilled, and I am pretty sure they cant be held by production. Otherwise they would have never released us 5 years ago. Thanks for the reply, I am wondering if this has happened to anybody else in the area, we were part of a large group that signed up back in 2010.

Permalink Reply by KB on August 18, 2022 at 6:16am

Hi James,

Was that the Smith Goshen group?  If so, I am in that as well.  I do think there was a pugh clause in that lease, but it has been awhile.  Sounds like you might need to talk to a lawyer.  

Permalink Reply by James M Stephens on August 18, 2022 at 6:36am

We weren't in that group, I don't remember what it was originally called. I keep for getting to pull that contract out of my files when I am home, I travel a lot for work. But I believe we had a Pugh clause, we are just off what used to be called Pugh road. Maybe I will remember this weekend. I hate lawyers, but it might be time for one.

Permalink Reply by Joe C. on August 19, 2022 at 11:19am

Did you have a Pugh clause put in the lease? If not, your whole 166 acres is tied into the unit.

Permalink Reply by Jeff Bishop on November 7, 2022 at 3:28am

Mr. Stephens. I did a quick check of the Belmont Co. Records and do not see where your lease was ever released. Are you associated with the club you deeded the property to in 2014? 

Priority no. 1 will be to see if you original lease carried a Pugh Clause. If not, I would think the whole lease is HBP. 

Regards, 

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