Hello, I’m new here. I own some Mineral Rights in Richland County, Montana, of which Kracken Oil is leasing from me. I received an “Application for Overlapping Temporary Spacing Unit” and I know nothing about this. Would someone on this Forum let me know what effect this has on my lease and what its purpose is? Do I need legal representation on this? Please can anyone help me on this? Kindest Regards, Gerald Reynolds II
An overlapping spacing unit is a mechanism that allows an operator to drill a well on the border between two existing spacing units. The new well will be shared equally by the owners on either side.
So if you had 100% of the royalties on one side of the fence and 0% on the other, you would have 50% in the new well. This applies to the new well only. Your royalty in the existing wells is not affected.