Has anyone heard of or seen any mineral rights owner (with attorney) going directly to the leasing company and negotiating (buying) a depth clause / Pugh clause or McLaury clause that would give the MR owner the right to lease below the current unexplored vertical well depth? Or has anyone had success with an attorney breaking a bad lease HBP that is producing a small amount of gas (no oil) but possibly not in paying quantities? Can anyone recommend a good OK attorney for us to consult with on these issues? Our lease has been held by production (HBP) since 1974 and we need to find any and all options for getting a new lease when that time comes in this area of Blaine County in the STACK - Section 33 14N 13W. We are going to talk to a good OK attorney but would love to hear what others in our situation have had success with in breaking bad leases. Thank you for any and all help. Greg
Ive heard it will take a class action lawsuit against the oil companies, to get them to lease the deeper rights if you didn't have a depth clause in the original lease. Also have heard that when an oil company is asking to change the spacing from the original spacing to 640 acre spacing which is to accomadate the oil spacing, they could possibly be violating the terms of the original lease, which was originally written to get gas. (at least in the area my minerals are located). Again it is going to take a class action suit against the oil companies because they will fight this tooth and nail. An individual alone is probably not going to be able to take on the oil companies on their on because of the cost. I am in a similar situation with my old leases written in the 90's. Very interested to hear what someone who has much more knowledge than I do weigh in on this discussion.
Paul.
We have used Cody McPherson for a few years. Things got crazy recently with 34-17-10 and Cody did a superb job of managing the players and the issues. I highly recommend him. That being said, we have never tried to get around a depth clause. He was helping us with competing lease offers.
Matt (friend me if you want more info)
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Cody J. McPherson
Mahaffey & Gore, P. C.
300 N.E. 1st Street
Oklahoma City, OK 73104-4004
405-236-0478 x 229
405-236-1840 fax
I appreciate your thoughts on this Paul. We have recently been offered a "top lease" on this section from Hi Pointe Energy and they made it sound like their attorneys could "break" the lease for not producing in paying quantities or they mentioned trying to buy out the current operator or buy out the unexplored depths below the vertical well in place. So it sounds like the legal side would focus on "paying quantities" and gaining access to the unexplored depths would involve buying an addendum to the lease. They mentioned $25,000 to buy the rights below the vertical well and leave the rights above in place. Interesting ideas. Like you I would be interested to find out if anyone has actually done this.
Thanks Matt for the info and referral. Always good to hear of other owners positive outcomes especially when there's an attorney involved.