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Coffee Shop
Arkansas - Natural Gas Drilling
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<blockquote data-quote="1982vett" data-source="post: 695057" data-attributes="member: 7795"><p>If they are still drilling @ $2.00 gas, the wells must be really good. But another reason to continue drilling are holding on to the leases. Depending on the contract. The only way to hold on to them might require them to drill which would go back to being good wells. Leases aren't always dependant on continuous production, but most do have a specified time for development to begin, such as a 1 year lease. Once in production the lease is locked in and production can be shut in or produced only enough to hold the lease.</p><p></p><p>If you remember, a lot of money was spent to obtain the lease. The company will lose the up-front money plus the lease if production hasn't begun by the end of the lease term. In many cases, drilling would be cheaper than risk loosing the lease or having to re-lease.</p></blockquote><p></p>
[QUOTE="1982vett, post: 695057, member: 7795"] If they are still drilling @ $2.00 gas, the wells must be really good. But another reason to continue drilling are holding on to the leases. Depending on the contract. The only way to hold on to them might require them to drill which would go back to being good wells. Leases aren't always dependant on continuous production, but most do have a specified time for development to begin, such as a 1 year lease. Once in production the lease is locked in and production can be shut in or produced only enough to hold the lease. If you remember, a lot of money was spent to obtain the lease. The company will lose the up-front money plus the lease if production hasn't begun by the end of the lease term. In many cases, drilling would be cheaper than risk loosing the lease or having to re-lease. [/QUOTE]
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