Newbie question here. I own an overriding royalty interest (ORRI in the south half of the northeast quarter (S/2NE4) of Section 25 in T21S R34E in Lea County, NM. There are three permitted directional wells in that tract, which I have circled in red. So my question is, am I paid (assuming there will be production) my ORRI based on where the rigs are (the blue dots) or by where the oil will be extracted? Since it’s a horizontal well, they could drill down directly below but then change directions and, say, extract the oil from a different part of the section or a different section all together. Would I receive payment in that case? Relatedly, I notice that there are another two wells with very similar names that are exactly to the west in what appears to be straight line, circled in black. What does that mean? Are they part of the same well? Does that straight line represent the direction of the horizontal drilling? Thanks.
The surface location is irrelevant for horizontal wells. The royalties will be paid to the mineral owners who own interests in the spacing unit, which will be designated by the State. For horizontal wells, the spacing unit will typically be a rectangular shape that includes and extends outward from the productive portion of the wellbore, i.e. where the oil is actually coming from.
Thank you very much.