Hello,
Our non-producing mineral lease expires in October. We are receiving a landowner royalty from the neighbor's well via a Division Order. If we do not renew our lease, does this effect the existing Division Order? Also, if we are not leased and more producing wells (horizontal) are drilled around us are we ineligible for LOR due to our minerals not being leased? Thank you for your thoughts.
Anthony: sounds like you acreage was spaced into the 'neighbor's well'. If so, your lease is a producing lease and won't expire in October. If additional horizontal wells are drilled around you, it will depend on how they space those wells and whether your acreage is included in the spaced unit for you to receive additional LOR.
Send more info (Twp-Rng, Sec., etc.) and we can figure this out quickly.
Steve and DM thank you for your replies and I apologize for not getting back on this forum. Our lease expiration date was 10/28/13 and I now have a better understanding of what you meant by our lease won't expire and is held by production!! We do not get to re-new our lease! This is still very confusing to me. Our mineral property is in T7N, R65W, Sect 14. A company is wanting to seismograph the area and this brought up that our minerals are still leased. Based on what they're telling me, am I correct to understand that I have to STILL abide by the lease ie allow access, exploration (seismograph), and even a well to be drilled without a new lease? Hopefully someone can educate me on this. Thank you.
Anthony: directional wells in 23 by Bayswater have included some of the SW parts of 14 in spacing. Be patient. Noble has at least 6 active locations in section 14.
Appreciate your staying in the conversation Steve. Couple things I guess. I’d still like to understand how much control I have, IF ANY, over the land/minerals in a lease held by production (from a well not on my property). Specifically if I have to enter into the contract for the seismograph. They are pressing real hard. Another thing is the royalty payment we are getting from the Division Order will take about 40 months to catch up to the bonus payment we received in the lease. And since we can’t collect on a new lease this seems like a pretty raw deal. Maybe this is what you meant by be patient. Finally, if we’re spaced in the unit of these other wells you mentioned, should we be researching to get a Division Order with them? Thanks.