Continuous development: keep drilling or let go
A continuous development clause says that after the primary term the company must keep drilling new wells on a schedule, or release the land and depths not held by producing wells.
What it does
Without it, one well can hold a large lease for as long as it produces, with no duty to drill more. The clause puts a clock on the rest of the land.
The schedule is usually a stated number of days between wells, such as 120 or 180 days from finishing one well to starting the next. When the company misses a deadline, the lease ends as to land outside producing units.
It matters most on a large tract, or where horizontal wells are being drilled nearby. It works together with the Pugh clause and the depth release.
What we mark on a review sheet
Normal
- A set number of days between wells after the primary term.
- A release of land outside producing units when drilling stops.
Missing
- Any duty to keep drilling at all.
- A recorded release when the clause ends part of the lease.
Ask about
- Long gaps allowed between wells.
- Credit for wells drilled on other land.
Questions to ask the company
- Will you add a continuous development clause after the primary term, with a set number of days between wells?
- When drilling stops, will you release land and depths outside producing units and record the release?
Common questions
What is a continuous development clause?
A lease clause requiring the company, after the primary term, to keep drilling wells on a schedule or release the land not held by producing wells.
Do I need a continuous development clause?
It matters most when the lease covers a large tract. Without one, a single well can hold all of it.
Send it before you sign
Tell us what you got and what you want to know. We reply by email and tell you how to send the pages. A landman reads them and sends back a one-page review sheet.
Email hello@landman.review with what you got and your question, or call (307) 263-8515.