Monday, February 13, 2012

"Held By Production" and Other Basic Information for Mineral Rights Owners

Elsewhere they are talking about mineral rights -- fairly basic but folks continue to ask these questions.

This is probably most important:
If your mineral acres are included in a  spacing unit and a producing well is drilled anywhere in that spacing unit, your acres are now "held by production" if that well produces oil.
I'm not sure if that has been made clear in early posts. 
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1 comment:

  1. AnonymousFebruary 13, 2012 at 11:49 AM

    That is true. But it is not the complete picture. What is more important is that acres contained in the lease that are NOT in a producing spacing unit are ALSO hbp by the same well UNLESS the lease has a Pugh "clause". A Pugh clause releases acres in the lease that are not in producing spacing units at the end of the primary term. The Pugh clause is necessary unless the mineral owner's land covered in the lease is in one spacing unit only. Oil cos generally don't offer Pugh clauses but usually will include when asked.

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