Drilling Under One Unit to Reach Another

Oklahoma Mineral Rights
1

In Woods County an E&P company reduced spacing from 1 well in Unit B to 3 wells. 3 permits were issued Sep 2015. In Jan and Feb 2016 two of the permits were amended with end points adjoining unit B. One in unit A adjoining unit B to the south and one in unit C adjoining unit B to the west. All three horizontal wells will be drilled from a single location in the north central portion of Unit A. A horizontal leg will drill diagonally NW under Unit B to reach and endpoint at the NE corner of Unit C. I assume this is a strategy to hold all three units by production.

  1. Is drilling under one unit to reach another an acceptable practice?
  2. How will royalties from the well in unit C be allocated between unit C and unit B?
  3. Should royalty owners in unit B protect themselves?
2

Hi Alan,

Don't know if u can add a diagram here, but it would help. Cheers.

3

It would be helpful if we knew the OCC identifying numbers from the spacing order(s), location exceptions, applications/permits to drill, etc. The numbers are in this form: Cause CD No. 20150xxxx. You should have received these in the mail from the attorney of the company making the application. There are often Exhibits (some are maps and charts) filed in support of these applications to assist the OCC staff in their recommendations to the Commissioners. Usually the only way for most mineral/royalty owners to see or even be aware of these is to look online.

If you will send these # I can look them up and post links. At the very least, the legals are needed to look up information. The CD # just makes it a little easier.

The quick and short answers 1. yes, 2. in multi-unit horizontal wells, % allocation based on number of feet of production casing exposed in each unit 3. not sure of what you mean because the rules governing multi-unit wells are established to comply with recent legislation.

4

Thanks for your response Wesley. I am not as concerned as I was when I sent this. A friend who is an experienced horizontal driller explained to me that the wellbore can start off in any direction and then be turned to go near the section line to the adjacent section before turning north again. If that is what they are doing then the completion will take place in the adjacent unit.

The spacing order is 645998 in Cause CD 201504212-T.

3515122329 17501 BUDY 1-20 DRY PA 20 25N 14W Indian W2 W2 SE4 SE4
35151244240000 23079 GOUCHER 2514 1H-17 BB 20 25N 14W IM N2 NW NE NW
35151244240000 23079 GOUCHER 2514 1H-17 BB 20 25N 14W IM N2 NW NE NW
35151244250000 23079 GOUCHER 2514 2H-17 DD 20 25N 14W IM NE NW NE NW
35151244260000 23079 GOUCHER 2514 3H-17 CC 20 25N 14W IM NE NW NE NW
35151244250000 23079 GOUCHER 2514 2H-17 DD 20 25N 14W IM NE NW NE NW
35151244260000 23079 GOUCHER 2514 3H-17 CC 20 25N 14W IM NE NW NE NW
35151244260001 23079 GOUCHER 2514 1H-20 A 20 25N 14W IM NE NW NE NW
35151244260001 23079 GOUCHER 2514 1H-20 A 20 25N 14W IM NE NW NE NW
35151244550000 23079 GOUCHER 2514 1H-18 D 20 25N 14W IM NE NW NE NW

933-CaptureOCC.PNG (236 KB)
5

Symbolically or otherwise, these are low down strategies. My Dad's situation is symbolically the same when his land in Marshall County was sold fraudulently after his mother died in 1927 and later his mineral rights were again fraudulently confiscated by some rather well known folks in that same area. Of course, if negotiations fail, you can take the matter to civil court. Shameful that such efforts are often required.

6

H. Nowlin, too bad what happened with your family's mineral rights.

In looking back to Alan's Discussion, I see that Kent asked for a diagram. Since I could not find one for Alan's situation, this one will serve as an example http://imaging.occeweb.com/AP/CaseFiles/OCC4177850.PDF . All four wells were drilled from the same pad in the section to the south. One drill bore actually goes into another section, as seen on page 6 of the well Survey http://imaging.occeweb.com/OG/Well%20Records/004004FB.pdf . It is important to remember that the casing in Sec. 4 and Sec. 10 are cemented. Only the portions of casing in Sec. 33 are perforated, and since this is woodford shale, frac treated. These were all completed in 2009, and now in 2016 multi-unit wells are often being drilled, which allows more footage within a section to be perforated for production. I hope this is helpful.

7

Thanks Wesley.

One question (for the semi-ignorant folks among us) - what row, and/or column on page 6 of the Well Survey indicates that one drill bore goes into another section ?

Cheers.

8

Kent, my apology for the confusion. It should have been page 8 instead of 6 on the survey. When I was a kid we could blame the dog for chewing up the homework, now it is the computer! I often work with 2 or more browsers to copy links and compose, in this case Opera does not register the correct page, and I neglected to check the number printed on the actual page.

So, maybe this will help, using info from pages 8, 9, 10, and 14. At the bottom of the page 8 you see 8,100' (that is where the bore crosses the section 3 boundary line). The radius of the turn from vertical to horizontal had begun at 7,707' as shown on the completion report (page 14 of survey, about 2/3 down on the page). The hole is angling mostly to the east. The table on page 10 shows they entered the Woodford formation 268' from the north line and 467' from the west line of sec. 3 after angling more northeast as shown on the map on page 10. Each of the graph squares is 100', so the bore enters sec. 33 about 400' north and about 600' east from where it entered sec. 3, then comes around to 7 degrees as shown on page 14. On these shale wells the entire casing is cemented and only perforated beyond the unit boundary setbacks, which are approved by the OCC.

The rows and columns on pages on pages 1-7 are the source of information on pages 8-10, compiled by folks with skills and patience way more than I have. What little I know, has been the result of many OK-NARO meetings, which always include OCC staff presentations on the use of their website.

9

Thanks!

After reading your notes, at first i was a little confused about how the bore could go (per your text and map on p.10) from section 4 to section 3 to section 33 without "circling back" to the west - but then I noticed the note in the middle of p.10 that says "The NE corner of 4-4N-12E is offset 1,078' west of the SE corner of 33-5N-12E." Thus the map on p.10 shows (appropriately) only one 'turn' to the north.

One thing re page 10's map - did u mean to say each of the graph squares is 1000' (one thousand feet) ?

10

No, I used the scale at the bottom and the right side of the grids. It is 100'. I should have reminded that sections along the top of the township are correction section and the offset varies. This is important to determining the decimal interest you own in the drilling unit and to confirm before signing off on a division order.

I tend to need a visual reference to understand how the well bore can be going down and angling to one side while at the same time be turning in a radius to eventually level our into the horizontal portion.

11

Hmm. Still a little confused - I don't see a scale on page 10 of the Survey Report, and, if the graph squares are 100', then (apparently) Sect. 33-5N-12E (shown by the bold lines on p.10), is only 800' feet on a side ??

12

Once again, sorry. Guess I am not paying attention to details. The scaled map is shown on pages 8 and 9. I'll try to do better.

13

Thanks. Yes, the graph squares on the page 8,9 maps clearly represent 100'. I don't believe the graph squares on page 10 represent 100'.

14

Thank you, Wesley Skinner. What I can say for sure is this...it can happen to anyone!