In 1953, my grandfather signed a lease for 1/8 RI with Phillips Petroleum for what has become the “Burford A 1-7” in the E,NW of Section 7-4N-4W of Garvin Cnty. It’s now operated by FDL and they are paying us for that. Then in 2015, the OCC granted a Pooling Order (646776) to Continental for a multiunit well in Section 7-4N-4W & Section 6. We were not named as respondents in the Pooling Order. Is that because my grandfather already had a signed lease for an area within the section? We are currently being paid for the Casillas-operated Lori Ann well at 1/8 RI and I am trying to uncover why. They haven’t responded to my requests for further info.
The answer is mostly likely yes, because your grandfather signed a lease back in 1953. Many of those old leases were from just below the surface to the center of the earth so hold all levels whether known or not at the time of the lease. If you are getting paid for the new well at 1/8th, then that is why. Lots of us are held by the old leases.
I’m looking at another situation which went a different way and am thoroughly confused. In 2003 my mom signed a pooling election for the Alliance Trust vertical well (35-4N-5W Grady Cnty), then owned by Anadarko and now owned by Daylight. In 2011 she leased with Meadows for what became the Marathon Trigg 1-35H horizontal well. If a horizontal well encompasses the entire section and she was already leased on another well in that section, why could she sign another lease? Is it a question of depth clause in the original lease or location of perforation? We have this in a few instances where we have producing vertical wells and then have been pooled or signed a new lease for a horizontal well in the same section. Just when I think I start to understand, I’m confused all over again!
The pooling only covered certain formations. Therefore she had rights in other formations that she could lease.
In order to understand in which formations she has rights available to lease, where do I go? Would I find these terms in the original lease and then compare it to the specifics in the Pooling Order or another OCC order? For example, in Cause #202102075 & related, Marathon has asked for pooling on a multi-section well. We already have at least two wells in production in one of the sections (Garvin 34-4N-4W): one is vertical (NEPSU-Daylight) and the others are horizontal (Action Jackson & Rollins both Marathon). How can I be sure that one of our existing leases will cover new well activity and thus negate need to be pooled or newly leased?
Start with the deed or probate document to get a description of the acreage involved. Then work in chronological order oldest to newest to see the progression of events.
If there was an original lease, then read the terms and see if it had a depth clause, if a well was drilled or if it expired before drilling or if it is expired due to production ceasing. If there was a pooling first, then the pooling only covered the reservoir(s) listed in the pooling and left other zones open to lease or pool.
If you are open in a reservoir of interest, they will find you if your contact information is filed in the county courthouse where the minerals are located.
If they want to drill additional wells in a reservoir that is still in production and has already been spaced and your acreage lies in the spacing and you have been leased or pooled, then you don’t need to be worried. You are held by production and in the secondary term of the lease.
Thank you so much, Martha. Your suggestions are truly worth their weight in gold!
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