relatively new to this, so its possible this is pretty easily explainable , but I have a DO under a old lease that lists 3200 gross acres, on the permit to drill for this same lease it lists somewhere around 3800 acres. The company is definitely using the 3200 the math checks. but I do not want to sign something that is in error that I will be on the hook for. its a horizontal well so the scenarios that I thought of were easements etc but I dont know why such things would not show up in the DO. thank you for the assist
The lease can cover 3200 gross acres, but the drilling permit for a specific well (which is how drilling permits are issued) might contain a larger amount of acreage. This is not uncommon for horizontal wells. It’s possible that the extra 600 acres could be contributed by someone else’s lease adjacent to yours, perhaps to allow the well to be drilled through your lease and some distance into the adjacent lease. Horizontal wells two miles long or longer are not uncommon, nor are parallel horizontal wellbores staggered to look like stair-stepped toothpicks when looking at a plat map of a fully developed horizontal prospect area. Not all horizontal wells are drilled in batches of 2-5 from a single drilling pad.
The company could use the 3200 gross acres in your calculation if the wellbore continues outside your 3200 acres. The extra 600 acres could be from an adjacent lease/unit. Your royalty decimal would be calculated using the percentage of length of the wellbore inside your 3200 acres, and you would get your proportionate share of the royalties just for the 3200 acres. The remaining length of wellbore would be attributed to the other 600 acres not part of your lease, and those royalty owners would get the remaining royalty share from the well.
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