Grady County, OK - Oil & Gas Discussion archives


What is the purpose of setting up multiple hearings with the OCC (eg. a hearing is set on April 2 which an Order is granted, then you go back two weeks later for a continuance, then a month later an Affidavit is provided, but the permit has still not been granted)?


Papa Gordon,

Please give a case/cause number as an example.

I haven’t seen the situation as you describe exact exactly as you describe it.

Case applications do not result in a permit directly.


Rick, an example would be 201703512.


Papa Gordan,

The "interim" order was made on this location exception. That gives a planned drilling location the final order will come after the well is drilled and surveyed.

No permits are issued from Spacing, Multi-unit, location exceptions, or pooling applications. There is a separate process for the permits. The permits will reference these cases and orders. In some cases a permit will be issued before a pooling.

Usually the pooling is the last case to be completed.

I have seen several delays in obtaining permits on the part of the operators. That has happened for the last several years I have actively followed them.


Rick, not sure what you mean about pooling. Section 5 is already leased and has a producing well. But perhaps I don't understand the pooling concept. I think of pooling as those that do not have their minerals leased being pooled into one agreement. I would think that pooling agreement would have already been assigned after the Cunningham Well four years ago. I apologize for my ignorance. I would like to better understand.


Papa G. I’m also confused about pooling along with so many other concepts in this business. I love the forum and there are some really smart folks up here that are so very knowledgeable and helpful but it can be frustrating. Our family has minerals all over OK and the barrage of lease/buy offers along with the steady flow of OCC filings for this or that makes my eyes cross. Yet we still need to make informed decisions. The forum is so full of great information and I’ve been going back through the threads lately discovering rich deposits particularly on the unitizing and pooling concepts


Mr Gillette, pooling can sometimes be a difficult concept to grasp. You have to think of the rock formations beneath the surface as potentially having different owners and different operators. I have an interest in a section in another county where a well is producing from the 1st Bromide and another well is producing from the Woodford. These two wells are operated by different companies. The 1st Bromide well is assigned 160 acres which means that not everyone is included. Anyone with an open interest or leased interest in the 1st Bromide is included in that well. The Woodford well cover the whole 640 acres which means anyone in the section with an open or leased interest in the Woodford is part of that pooling. The pooling is not the section but the interest in the specific formation mentioned in the pooling and covering only the part of the section specified in the pooling. Is that a bit more clear?


A term missing is spacing, spacing unit or drilling unit. The unit is the area in acres of the field being produced, determined by law or by the corporation commission. The owners of the unit are all paid proportionally to their ownership of the unit. Paying all owners in a drilling unit proportional to ownership is pooling. That can happen two ways. You can agree to lease your land, and when a company manages to put together enough leases to get permission to drill an area as a unit, you came to being pooled in that unit voluntarily. When a company has a substantial amount of leases or direct ownership in a proposed unit, but not all, they ask the corporation commission for permission to drill and for forced pooling of the other owners in the unit. That is the point of a pooling hearing, to give those owners notice of what is impending and to determine how they will share in the production. A unit can be a section, part of a section, or more than one section. Thus, you could own all of a section, have half that section joined to another section into a unit, and you would be pooled with the owners of other section and paid proportionally. The remaining half of your acres could still be pooled into another well, (if your lease allows.)


It is starting to make sense. Stephen, correct me if I am wrong but I believe your statement refers to depth clauses. If I own a 1/4 of a section, 160 acres of mineral, then I could have leases to multiple operators depending on the depth of my lease or leases. Is this correct?


Papa Gordon,

From my comment you are focusing on the pooling when my comment was mainly trying to establish that a permit is not the result of the applications listed. It was in response to the part of your statement “but the permit has still not been granted”. Yes, in this case the previous pooling order covers the subsequent wells into the zones lists including the Springer and Morrow this new well will target.

However, a permit is still not issued as a result of any of these applications. A permit is an approved 1000A Form that has been submitted by the operator. I see delays in the operator submitting these all the time. In many case they are also submitted and approved prior to the orders being issued.

Yes, you can limit the scope of your lease to a particular formation or depth. Depth clauses can also release formations. Say you had a lease with a 3 year primary terms with a clause that release all formations 50’ below the lowest producing formation. They drill a Hoxbar around 8000’ At the end of the 3 year period, the lower zones like the Springer (around 11000’ here) and Woodford (around 12000’ here) is released. A subsequent lease or forced pooling would be required to encumber these lower formations. It could be different operators than the one that is operating the Hoxbar. Those that did not have a depth clause would be HBP on the Hoxbar well. The operator of the new well in the deeper formation would negotiate with the Hoxbar operator instead of the mineral owners.

Depth clauses are common.
Leasing specific formations or depths happened but less often.
Releasing upper zones happen but are rare outside of land controlled by the State Commissioners of Land Office.

Remember however, the terms of the lease must be acceptable by both parties. It is a much more difficult negotiation process to get specified depths or formation, and releasing upper zones than it is to get a more conventional depth clause. Even the depth clauses have many variations.

In this particular pooling order, all of the above formations were deemed “common source of supply”. There was quite a bit of effort to prevent these (what I consider) overreaching poolings from occurring.

Here is an example of a current one in section 8 6N-6W, just below section 5. It only is covering the Mississippian, Woodford, and Hunton formations as a common source of supply. The one on section 6 in 2014 covered 11 formations.


We've covered Springboard pretty thoroughly on this blog.

Continental also launched Project SpringBoard in the Springer Shale portion of the SCOOP, covering 70 square-miles and about 45,000 gross (31,000 net) contiguous acres. The company expects to eventually drill about 100 wells targeting the Springer and up to 250 wells into the Woodford and/or Sycamore.

But what about ANOTHER PROJECT in Scoop after Springboard?

Stark also disclosed that Continental has "another project of pretty much similar size and scale and working interest that would be up after this. It is in the SCOOP."

Another project of "similar size and scale".

Scoop is big in Grady County and Continental owns a lot more acreage than just the Springboard.

So does that mean another 350 wells in Grady County after Springboard?

Who knows?



Thanks for your help Mr. Barnes. I received my check and an apology from American Mineral Partners.


Thanks Rick! I appreciate the time to type this out. This has helped me to have a better understanding. What I find interesting is in the documents for 201703512, there are two public notices where 5-06N-06W was published in the Chickasha Star and the Edmond Sun. A family member pointed out that this usually happens when permits are granted. But I realize a permit has not been granted.


Can somebody tell me if Sec 15&10 7N-7W is in one of these areas. I never know what I am looking at in these maps. Thanks.



Here you go Robert.


Thanks Carl, it looks like we're right in the middle of both projects.


Robert. Yes indeed it does. We're a bit further down and east in 4N-6W but still in the play. It's really hard to tell from all the information available whether all of this excitement will convert to actual dollars flowing into the coffers but one hope. My challenge has and continues to be weighing the bonus and purchase money being waved under our noses against the prospect of royalties from the minerals. You can certainly do calculations from the EUR's (Estimate of Ultimate Recover) provided by the operators and we also have good historical data from existing wells. Then we can glean good council from some many of the great folks here in the forum which almost to a person recommend NOT selling the minerals. But some of these outfits are throwing 'stupid' purchase offers out there which only strengthens that argument to hold. These outfits know the dollars involved and bank on our ignorance and lack of information to take advantage. I did some quick calculations for our area and came up with this: In a typical 640 acre unit (which most all lateral wells are unitized to this size now) if an outfit paid even $10K per acre to purchase all the minerals in that section they'd only be out $6.4 mill but they would own 100% of the production. With the typical lateral well costing $10-12 mil to bring on line combined with another $6.4 in acquisition the EUR's are in the neighborhood of $75 mil over the life of the well. That's a pretty darn good ROR in my book.......which is why the scavengers are out throwing the stupid money. I saw in an earlier post where offers had reached $25K per acre and someones response was " show me $35 and we'll chat". Now that's stupid money on steroids.

Sorry for the long rant.......this stuff gets me juiced plus 3 cups of java flowing in the vains.......


Steven. Yes the concept is beginning to clarify in my mind and I appreciate the good info. So then it’s possible then to have multiple operators going after multiple zones (understood to be common sources of supply) requiring multiple pooling orders all in one section. Guess that’s what’s referred to as “fully developed”.


Thank you Carl for your analysis.....juiced or not it helps me understand what might happen in the future market.


Carl: And I suspect that some of these offers are in anticipation of flipping the contract to another buyer; and if that doesn't work out, the contract is never signed by the offeror. But I may be too cynical.