| Popis: |
Over the last 18 months, natural gas operators from all over the world have converged on Western Pennsylvania. Their goal has been to secure new leases from landowners holding valuable mineral rights in the deeper Marcellus Shale formation. This rush to access the Marcellus Shale is now creating tension between landowners with existing oil/gas leases and their respective lessees. The royalty payments generated from these older, shallow well leases pale in comparison to the large signing bonuses and high-volume royalties associated with deeper Marcellus wells. As such, many of these landowners are now trying to, “get out” of their existing leases and sign new, potentially more lucrative, Marcellus leases.Terminating a producing gas lease is difficult. Almost all gas leases have secondary terms of indefinite duration so long as gas is being produced, “in paying quantities.” Essentially, this means that an operator can maintain and hold the leased acreage with a single producing well. Does the operator, however, now have an obligation to explore the deeper Marcellus formation? Put another way, can the operator ignore the Marcellus formation and still maintain the lease? Some states have recognized an implied lease covenant which requires the operator to drill exploratory gas wells into unproven formations and strata or risk cancellation of the unexplored portions of the lease. This controversial covenant is popularly known as the, “implied covenant of further exploration.” |
