We signed a lease with Magnum Hunter 4 yrs ago for them to put 4 wells on the Brauer property. We are part of a pool of 500 acres. The lease was transferred to Penn Virginia in 2013. Thus far, there have been two wells drilled. The lease expires March 2015. Is Penn Virginia obligated to fulfill the original lease? If not, what is our recourse? Thank you
I beleive, that I would be on the phone with my lawyer Monday morning. Or on the way to see him or her, to clarify what the terms of the first lease were, and if they were transferable, or not. If you call PVA you may get one of those customer service reps, we all know and love to talk too.
First and foremost, I agree with what John says about an attorney. However...
You say that, "We signed a lease with Magnum Hunter 4 yrs ago for them to put 4 wells on the Brauer property.'
I'm confused. Are you saying that you have on paper, signed and countersigned, something to the effect that not only will you be getting a lease bonus of $xxxx/acre plus xx% royalty for a five year term, but ALSO there's a clause stating that during that period there will be four wells drilled? If yes, that's an astounding lease in my opinion and great for you. On the other hand, if that was just verbal, talk is cheap.
Will you please clarify your statement? Thanks.
We do not own the property.
We own 1/2 of the mineral rights of the leased property. When Magnum Hunter sold the leases involved within the pool to Penn Virginia, we called and questioned the validity of the lease and we’re told the said original lease remained in force. The lease that would reflect the permits for four wells was signed by the property owner and the lease we have reflects the mineral interest in the property.
Hm. I'm still confused, but that's probably me.
If you have 'the original lease' in hand and can see some mention of four wells that WILL be drilled (as opposed to just permitting), then you should know what's required of PVA. If you don't have the original lease, you can go to texasfile.com and search for it in the Lavaca County records. Then if you want to see what was filed at the courthouse you can either (1) register with texasfile.com and put a minimum of $20 on account with them to download/print that lease or (2) go to the courthouse and manually make a copy of the document.
I can personally say that I've put money on account with them and have no complaints.
Good luck.
Again, even if the original lease says something to the effect that 'yes, I will permit surface operations for up to four wells on the leased property', I don't think that in any way requires the Lessee to drill four wells. That's something you'd probably see on the lease. Posters around here can probably point out at least five permitted wells that were never drilled. It's only an authorization; not a commitment.
I think WI hit the nail on the head, you need an iron clad drilling comittment for 4 wells or you are wasting your time. If it was a 5 year lease and it is only year 4, they probably aren't late yet. They could begin pushing dirt any time.
Washington Irving said:
Hm. I'm still confused, but that's probably me.
If you have 'the original lease' in hand and can see some mention of four wells that WILL be drilled (as opposed to just permitting), then you should know what's required of PVA. If you don't have the original lease, you can go to texasfile.com and search for it in the Lavaca County records. Then if you want to see what was filed at the courthouse you can either (1) register with texasfile.com and put a minimum of $20 on account with them to download/print that lease or (2) go to the courthouse and manually make a copy of the document.
I can personally say that I've put money on account with them and have no complaints.
Good luck.
Again, even if the original lease says something to the effect that 'yes, I will permit surface operations for up to four wells on the leased property', I don't think that in any way requires the Lessee to drill four wells. That's something you'd probably see on the lease. Posters around here can probably point out at least five permitted wells that were never drilled. It's only an authorization; not a commitment.
I should also clarify that Magnum Hunter did drill two wells on the property in 2012 which are still producing.
Then unless there's lease language to the contrary, your minerals are Held By Production (HBP) which in effect means that if the Operator is producing in marketable quantities, then the lease remains in effect until they are no longer producing in marketable quantities. This situation can exist literally for decades, and in fact you should be happy that they drilled a second well because they most likely could have just as well stopped at one.
I'll say again that you need to look at the lease and see if there's any language in there that clearly states that they'll drill four wells. If not, then you're done.
Beth Ricks said:
I should also clarify that Magnum Hunter did drill two wells on the property in 2012 which are still producing.
Thank you for your feedback! We appreciate it.
Thank you Amy.
There are a lot of pools that are being drilled with more than 2 wells. They may come back to yours and drill a couple more. It's all a waiting game and that is what we are doing. We haven't even been drilled yet. So we are just waiting, waiting and waiting.
Beth Ricks said:
Thank you Amy.