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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