Louisiana Continuous Development, Retained Acreage, and Depth Limitations

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This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the standard lease form.

Louisiana Continuous Development, Retained Acreage, and Depth Limitations are important concepts in the context of oil and gas exploration and production activities in the state of Louisiana. These regulations and requirements help govern the efficient and responsible utilization of the state's natural resources. Let's delve into each of these terms and explore their various types: 1. Louisiana Continuous Development: Louisiana Continuous Development refers to the requirement for lessees or operators of an oil or gas lease to undertake continuous exploration and development activities on their leased lands. This regulation ensures that the lease areas are productively utilized for energy extraction, preventing hoarding or speculative leasing practices. Failure to meet continuous development obligations can lead to lease termination or relinquishment. Types of Louisiana Continuous Development: — Drilling Obligations: Operators might be obligated to drill a minimum number of wells within a specified timeframe to maintain lease rights. — Production Requirements: Lessees may need to establish and maintain continuous production from their wells to uphold lease rights. 2. Retained Acreage: Retained Acreage pertains to the portion of leased lands that a lessee can retain after the primary lease term expires. The concept helps prevent the unnecessary holding of acreage that is not being actively explored or developed, ensuring fair access to resource-rich areas. Types of Retained Acreage: — Drilling Spacing Units: Operators may be required to release or relinquish portions of their leased acreage that lie outside drilling spacing units, which are designated areas that optimize well density and efficiency. — Special Lease Provisions: Certain lease agreements may have specific provisions governing retained acreage, such as the release of acreage not held by production. 3. Depth Limitations: Depth Limitations refer to the restrictions on exploration and production activities based on the vertical depth of oil or gas reservoirs. These restrictions could be imposed to protect shallower formations, mitigate environmental risks, or prevent unnecessary wastage of resources. Types of Depth Limitations: — Shallow Depth Limitations: Restrictions on drilling beyond a certain shallower depth range to protect freshwater aquifers, environmentally sensitive areas, or subsurface structures. — Deep Reservoir Restrictions: Limitations imposed on drilling beyond a certain depth to avoid high-pressure formations, technically challenging conditions, or cost-prohibitive operations. Understanding and complying with Louisiana Continuous Development, Retained Acreage, and Depth Limitations are crucial for oil and gas operators to operate within legal frameworks, optimize resource utilization, and protect the interests of all stakeholders involved.

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FAQ

The point of a retained-acreage provision is to be able to seek a new opportunity to lease unworked land to a different lessee, one who might do something productive with it. A Pugh clause is a negotiated provision in favor of the lessor. Pugh clauses modify pooling/unitization rights.

A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.

A clause in an oil and gas lease establishing the acreage around a producing well or pooled unit that the lessee is allowed to retain after termination of the lease if certain conditions are met. There is no standard retained-acreage clause, and these clauses vary by lease.

Held by production is an oil & gas industry term indicating a property is under lease and that the lease is being perpetuated in the secondary term by the production of oil or gas in paying quantities. An oil & gas may be in HBP status for many years if the wells located on the leased land keep producing.

Any provision resulting in acreage being released after production is a Pugh Clause. A Pugh Clause is a type of retained acreage provision that is only applicable with regards to pooled or unitized lands. A Pugh Clause is completely inapplicable when there has been no pooling or unitization.?

A Pugh Clause is enforced to ensure that a lessee can be prevented from declaring all lands under an oil and gas lease as being held by production. This remains true even when production only takes place on a fraction of the property.

Retained Acreage ? A clause that provides that a lease will continue after the expiration of the primary term as to a certain number of acres associated with each of the wells drilled under the lease.

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This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease ... The Retained Acreage clause is used in an oil and gas lease to protect the lessor's interest when a lease is held in force by continuing production or other ...Oct 8, 2019 — Generally speaking, the Retained Acreage Clause is a lease provision that authorizes the lessee to retain an agreed amount of acreage around a ... by JS Manuel · 2019 — In the context of a continuous drilling lease, however, one can see the necessity of the acreage retention clause. In that case, the lessee ... Oct 19, 2015 — A retained acreage clause requires the lessee to release acreage not assigned to a producing well at the end of the primary term, or at the end ... Dec 30, 2019 — In this manner, the entirety of the lease's acreage can be retained under the lease even by production on one small portion. But in many states, ... Aug 29, 2019 — Add a “Retained Acreage” clause! • Retained acreage clauses “prevent the lessee from maintaining a ... Primary term or the conclusion of the ... The first exception shall apply to the tract of land formerly known as Pontchartrain Beach. The board, in its discretion, may allocate this tract of land to the ... Oct 2, 2018 — Louisiana mineral law was developed jurisprudentially over the years by the courts analogizing situations arising in mineral transactions with ... Such drilling shall constitute a "continuous development program" by which Lessee may keep this lease in force and effect as to all lands and depths . . . Page ...

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Louisiana Continuous Development, Retained Acreage, and Depth Limitations