I’ve seen some discussion about depth severance on Upton County deeds but I was wondering if anyone had any new information. I have ownership in all of sec 9 block A. Pioneer says that the lease may have a depth severance on it limiting to Dean and Wolfcamp. I can’t find any evidence of that severance in any deed or lease I have. Pioneer has gone silent since I asked them for more information. I’m sure they’re busy but I’m wondering if I am overlooking a source that would show me a severance. Does anyone have any suggestions?
There is a big difference between a depth severance in a deed and a depth severance in a lease. If there is a depth severance in your deed history, then you will only own certain depths and someone else will own the other depths. This would have resulted from one owner of all or a portion of the minerals selling the minerals above or below some depth. The depth severance in a lease results from a clause providing that depths below the producing formation or below the deepest depth drilled expire at the end of the primary term or the continuous drilling period. It is possible that your lease holds all depths but that other lease(s) have partially expired. If your lease has partially expired, then you should get a release from Pioneer. It is also possible that Pioneer only owns certain depths under your lease and that other depths are owned by another company. To determine any of these factors, you need to review your lease terms and the history of assignments of your lease in the deed records.
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Thank you. That is helpful. I will ask for additional information from Pioneer.
Pioneer is telling me there is a severance on the well, not the lease. It’s not a big producer and I don’t have reason to doubt them but I can’t find a severance listed for the well. I’m wondering if I’m looking in the right place in the RRC database. The well in question is 42-461-35329 operated by Pioneer in Upton County (7C) on lease 19176. If anyone is willing to look to see what I’m missing, I’d appreciate the help.
Do you have a statement in writing from Pioneer? Verbal conversations can be confusing because the you and the landman may be thinking about different questions. You need to look at your lease. Does it cover all depths? If so, does it have a provision that depths below the deepest depth drilled or the producing formation expire? Then you need to trace the history of assignments of your lease, from the original lessee forward to Pioneer and any other companies. For example, the original lessee was X. X drills a well to 7,500 feet. Then X assigns the shallow rights (surface to 8,000 feet) to Y and the deep rights (below 8,000 feet) A. Y assigns to D and D assigns to Pioneer. Then Pioneer only owns the lease to 8,000 feet. You have to trace the successors to A to see who owns the lease below 8,000 feet. It is not uncommon for older leases to be splintered among many different companies, by both depths and acreage. RRC does not have any concern about your lease. It watches to see if a well permit is issued to 7,800 feet and the well is drilled to only 7,500 feet and that is approved. If the well is drilled to 9,000 feet, then RRC will take action because of violation of the permit.
I’ll take another look through but I don’t see any depth provisions in the lease. All my communications are written. I can’t keep track of anything else.
In that case, you have to review all of the assignments of any interest in your lease that have been recorded in the Upton County deed records. Start with the recorded lease. Then look for any assignment from the original lessee to another company. Is that assignment of 100% or only a smaller percentage? If the latter, then the original lessee owns part and the new company owns part. Is that assignment cover all depths or only partial depths? Then you need to trace the assignments from each entity that acquires all or a portion of the lease to see who owns what rights. It seems that Parsley is telling you that it only owns a piece of your lease. If you have a very old lease, there can be many assignments. You also need to keep track of whether an assignee has merged with another company or changed its name.
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