Others in industry would have acted to prevent drainage 3 Drill offset well

Others in industry would have acted to prevent

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2. Others in industry would have acted to prevent drainage __________________________________ 3. Drill offset well
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Protection against Drainage Third Party Drains * Harmful to both lessor and lessee * Shared interest : drill offset well Lessee Drains * Harmful to only lessor * Conflict of interest : avoid drilling offset well
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Protection against DrainageLessor’s acceptanceof delay rentals = ratificationof lessee’s activities = waiverof implied rights? Notsuccessful defense for lessee* Payment of delay rentals eliminates need to drill, notneed to protect against drainage
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Diligent Marketing Market within reasonable time of production * When would reasonably prudent operator sell? Market at appropriate price * Price acceptable to reasonably prudent operator ?
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Lease Negotiation Exercise 60-acre tract of land in Midland, Texas Area of average productivity Several energy companies interested in leasing this land
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Landowners 1. McKinley, Dong, Ryan, Strickland 2. Hauglum, Cho, Luna 3. Fricks, Kupec V., Ramirez 4. Reeves, Carballar, Valentine Landmen 5. Graham, Kupec N., Morreale 6. Price, Franey, Setlur 7. Lakhani, Chandra, Thurmond 8. Roberson, Ashraf, Shairali
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In your role as landowner or landman:* Identify five key lease provisionsthat you want to negotiatebefore signing lease* Rankthose provisions in order of priority(from most important to less important)* Make changes and/or additionsto the language in those provisions which you will present during negotiations
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