With 640 or 1280 spacing in Eastern Montana, what does this mean exactly for someone who owns rights on 200-350-acres over 2 sections? If someone else drills first in a section and keeps their drill rig and horizontals on their property, does this preclude adjacent owners from drilling on theirs? Appreciate any clarification on how this works.
If a well is drilled in a spacing unit and your section is in the spacing unit (most common 1280 spacing on horizontal wells), you would participate in the well. Most horizontals are drilled North to South or vice versa. If you own acreage in two sections, only one section might be in the spacing unit of 1280 acres thus you would participate in that well based on your amount of net minerals in that section. Best scenerio is where your minerals in the two sections fall completely in the spacing unit.
Thank you Charles. Now, what resources are available on line that we can check whether there have been spacing units approved in the two sections we have interest in?
Family leased first section rights before anyone checked out this forum. Now we have same offer from same Co. for 2nd parcel which is adjacent to first parcel, in North South orientation. We also have been approached by someone else (Wildcatter?) who claims they could bring drill rig from out of state and would guarantee to begin drilling within 6 months with better terms. Trying to figure out whether to dicker for better terms from 1st party (major player in Bakken area), or split leases between 2 companies with shorter No/SO runs.
Any thoughts from you "pros?"(Roosevelt Co., Montana, 26,23,T28 57E)
Williams:
Most likely spacing units are in place for T28;R57E acreages. My acreage is located North of yours and it was spaced over a year ago as was numerous other acreages. You can always contact the Montana Oil and Gas Commission which approves spacing units or go their website and research numerous past Dockets in order to locate your area. You might have to go back to 2009 and it is very time consuming. There might be another way to gain this info but I've never found it. In regards to your offers, do some serious research into each company and get an idea about their past track record. Goal is to get the best lease, bonus/%royalty, plus a 3 year maximum lease; but getting drilled on is your ultimate goal. Be sure to do some homework about lease contents or wording and I would recommend you consider a "pugh clause" in your lease. Google "pugh clause" if you need more info on this. Good luck and sounds like your mineral acreage is in demand.
Williams said:
Thank you Charles. Now, what resources are available on line that we can check whether there have been spacing units approved in the two sections we have interest in?
Family leased first section rights before anyone checked out this forum. Now we have same offer from same Co. for 2nd parcel which is adjacent to first parcel, in North South orientation. We also have been approached by someone else (Wildcatter?) who claims they could bring drill rig from out of state and would guarantee to begin drilling within 6 months with better terms. Trying to figure out whether to dicker for better terms from 1st party (major player in Bakken area), or split leases between 2 companies with shorter No/SO runs.
Any thoughts from you "pros?"(Roosevelt Co., Montana, 26,23,T28 57E)
Does anyone know if T28 51E has been spaced yet? If so, do you have any idea what the current lease rate is in the area? It is on the reservation, so we are being told that there is not as significant of an interest in it than other areas. The current leasee has the only permits currently in the area, but has yet to put in a well. Please share your insight if you have any information. Thanks.
Michelle:
In order to correctly verify spacing in this area, you could go back through the hearing dockets at the Montana Oil and Gas website; click on "hearing info" at top ; click on "upcoming dockets" or "recent orders". You can go back to all dockets filed in 2010 to present. This is very time consuming but I can tell you that most likely all of this area has been temp spaced. Looking at the GIS map, this is what I see in the area: Nautilus Poplar, LLC has a well (EPU 34-11H) in T28N;R51E;Section 14....465 bbls oil in May reported; Vaalco Energy (USA) Inc. has a permit to drill in T28N;R51E;Section 2. There is also a P&A'd well which was an injection well, Samson Resources Co. (Huber 4) on the reservation area. This is the only things in the area which show up on this map in T28N;R51E. Over the next few years, this and other areas in Roosevelt County should show increased acitivity as additional rigs migrate from ND into the MT area. Also, current seismic shoots may be scheduled for the area.
Michelle Slyder said:
Does anyone know if T28 51E has been spaced yet? If so, do you have any idea what the current lease rate is in the area? It is on the reservation, so we are being told that there is not as significant of an interest in it than other areas. The current leasee has the only permits currently in the area, but has yet to put in a well. Please share your insight if you have any information. Thanks.