The United States District Court for the Middle District of Pennsylvania recently held that activities undertaken in anticipation of drilling on property pooled with the plaintiffs' properties satisfied the habendum clause of the plaintiffs' leases, extending their leases beyond the end of the primary term. See Roe v. Chief Exploration & Development LLC (Case No. 4:11-cv-00816). The habendum clause included language stating, "This Lease shall remain in force for a primary term of five (5) years from [commencement], and for as long thereafter as *** operations are conducted on the Leasehold in search of production of oil, gas, or their constituents ***." While none of the operations occurred on the plaintiffs' properties, the relevant unitization clauses stated: "[T]he drilling, operations in preparation for drilling, production from, or payment for Royalty *** for a well on such a unit shall have the same effect upon the terms of this Lease as if the well were located on the Leasehold."
The court, after going through a good discussion of the history behind the evolution of habendum clause language, had no trouble finding that the activities at issue satisfied these provisions.