In the case of Lawson v. Citizen Energy II, LLC, 2021 OK CIV APP 1, 481 P.3d 287, the question was whether commencement of drilling operations on one of two units for a multi-unit horizontal well served to extend a lease on an adjacent unit where the well did not penetrate the adjacent unit until after the end of the primary term. The plaintiffs were lessors under an oil and gas lease (the "Lawson Lease") located in Section 11 comprising a 640-acre drilling and spacing unit. That unit was adjacent to a separate 640-acre drilling spacing unit for Section 14 immediately south of Section 11. The Oklahoma Corporation Commission (OCC) granted to the lessee operator an application for a multi-unit horizontal well with a completion interval in both Section 11 and Section 14. The operator commenced to drill a well from a surface location in Section 14 with the intent of drilling a horizontal lateral north into Section 11. Operations were commenced on Section 14 before the expiration of the Lawson Lease. However, the lateral did not penetrate the Section 11 unit until after expiration of the primary term of the Law-son Lease. The parties dispute whether these operations in Section 14 satisfy the commencement clause in the Lawson Lease.
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