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Oil/Gas/Depth Clause

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Question
Hi frederick, I manage mineral's and the execution of leases in behalf of my Family. I have came across in Pittsburg Cty many yrs ago when we were able to lease the rights under the reserved acreage which was great,, 2 producing units and Bonus for the deeper rights.I always thought this was smart of my Father w/ this inclusion and therefore include it on future leases. Technically I can see why and O&G operator would not want this, But from a mineral owner perspective I do not see why not. Please read addendum I forwarded off to a CLR Rep. and advise of such wording. --- DEPTH CLAUSE:  In the event this lease is extended by commercial production beyond its primary term,  then on such date this lease shall terminate as to all rights one hundred feet and more below the stratigraphic equivalent of the deepest producing perforations in the well or wells located on the leased premises, or land unitized therewith. In the event this lease is extended by commercial production beyond its primary term,  then on such date this lease shall terminate as to all rights one hundred feet and above the stratigraphic equivalent of the shallowist producing perforations in the well or wells located on the leased premises, or land unitized therewith.       If Lessee is in the process of drilling or completing a well at the end of the primary term of this lease, this clause shall become effective upon conclusion of such operations.  -- Bottom line is from a mineral owner perspective and w/ today's drilling technology on exact zones where they intend to produce, why would you not try and then why is this never agreed to.

Answer
I rarely have any problems getting a depth clause included in my lease, but the one you provided above covers more than most companies are willing to agree too, hence I'd suggest just the first portion be submitted. Most companies that pay to drill a well are not going to want to give up their rights to formations they drill through to get to TD.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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