.The fact that a lease can be resold attracts some firms to speculate. A speculating firm

leases land and mineral rights not to drill but to sell the land and mineral rights at a higher price

later. However, a lease typically requires the leasing firm to drill at least one well within a

certain period. To avoid forfeiting the lease, the leasing firm has the incentive to drill at least one

well. This is perhaps why we observe a large number of firms that drilled a single well.