What is the advantage or reason of/for creating 2560 acre spacing units.
example: Tobacco Garden Section 5-6-7-8 T150N R99W. We are in 3-4-9-10. And 34 of T151N R99W. Are they increasing or decreasing number of wells?
Deloris, it would make it easier to drill on internal section lines. It would dilute all of the mineral owners royalty in future wells unless they previously owned an equal amount of acres in both 1280 spacings. When an operator petitions for a 2560 before they have drilled any wells, one would think they are doing it at least temporarily to hold more acreage by a single well but if the spacings are already held as 1280's it's to make administration easier and to facilitate drilling on section lines without having cross unit wells. Existing wells in the 1280's should remain spaced as 1280's because if they aren't someone will benefit and someone will lose because one well is going to be better than the other or each of the 1280's could have a different number of wells. I would not sign anything they sent my way concerning unitization or pooling.
We haven't received anything yet, but I have no doubt in my mind that something could come our way along these new lines. I know they will not have anyone's interest in mind except the oil company. I have 10 mineral acres in section 3/10 and 25 mineral acres in section 4/9. I sat and tried to create an outcome should they try to create our two 1280's into one 2560. I wondered if they would add the 2 decimal interests together and then divide it by two. Thus diluting sections 4/9 and increasing sections 3/10. Or just figure it as 35 mineral acres in a 2560 spacing. The math comes out the same, however, probably way too simple? There are permits for 7 wells in 4/9 with 1 producing and 2 in the process. The other 4 are just permitted. There is 1 producing well in 3/10 and 4 permitted. I was afraid they would not even be giving us an option. Sounds like a call to our lawyer in Williston for a heads up. My daughter works at a law firm here in Des Moines, but she told me the only oil they would know about was "corn oil". No help there! Thanks again Mr Kennedy, for your input. Deloris
r w kennedy said:
Deloris, it would make it easier to drill on internal section lines. It would dilute all of the mineral owners royalty in future wells unless they previously owned an equal amount of acres in both 1280 spacings. When an operator petitions for a 2560 before they have drilled any wells, one would think they are doing it at least temporarily to hold more acreage by a single well but if the spacings are already held as 1280's it's to make administration easier and to facilitate drilling on section lines without having cross unit wells. Existing wells in the 1280's should remain spaced as 1280's because if they aren't someone will benefit and someone will lose because one well is going to be better than the other or each of the 1280's could have a different number of wells. I would not sign anything they sent my way concerning unitization or pooling.
Deloris, it's my understanding that wells drilled prior to combining the 1280's into a 2560 retain their 1280 spacing.
Wells drilled after the 1280's are combined into a 2560 spacing will be on 2560 spacing.
If you receive something seeking your permission to change the pooling, I think it should be a warning because they probably had all the necessary pooling authority they needed from your lease so if they come back asking for more I would consider it not in my best interest until someone proved to me it was.
Thanks for the heads up. I've been watching the docket and have, at this point, not seen anything requested by
requested by XTO regarding our sections. I'm trying to play "what if".
The sections I saw on the Docket belong to Newfield, but they are right next door, which piqued my curiosity.
I'm glad I asked. Thank you, Deloris