PA Court: Preparing to Drill Locks Up All Land in a “Unit”

PA landowners listen up: If your gas/oil lease is near the end of its term with no drilling and you looking forward to signing a new lease, you may have a problem. If the driller holding the lease decides to do work in preparation for drilling on your neighbor’s property, you’re locked in too if your land is part of the drilling “unit.” According to a court case recently decided in PA, if a driller prepares to drill (which may be as little as moving around some dirt, depending on the language in the lease), the obligations of the lease are then fulfilled and all land in that unit is locked in–even if actual drilling doesn’t happen for a long time.

In legalese it’s called the habendum clause

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