Back in 1981, I negotiated a lease for 1/5th Royalty and $2500.00 per mineral acre. It was for a Deep Hole Well below 15000 feet.
The spacing was one (1) well in 640 acres.
Everyone was to share based on Their Royalty & Mineral Acres own.
This Sounds like Utilization. Is that correct?
John, that is a probably a regular well. It is normal for a deep well like that to be spaced at 640 acres and all mineral owners share in the royalties from it. You can think of it as a small unit. However, not knowing where you were located, I can’t say for sure.
The secondary recovery units tend to be much larger in acreage and need to be unitized in order to handle the injection of water or gas to get more hydrocarbons out of the ground when the pressure has gone too low to be efficient.
MMarks: Get a copy of the proposal and read it. It is a mishmash of a system that apparently was used for a regular set of wells (including offshore wells) as I recall. As part of the proposal a 1/8 portion was “reserved” for the loss or, the extra 1/16 paid for the repressuring of the source.
“Lessor”. Darn spellcheck did it again.
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