Horizontal spacing hearing

Just curious...does anyone know how far away actual drilling takes place afte a horizontal spacing hearing. Or at least what other steps must be taken before drilling may start?


If the hearing is not continued, it is recommended for the issuance of an order. The recommendation is reviewed and issued or sent back for review based on the examination of facts and availability of the lawyers to draft the order. Once and order is issued, the timing will be dictated by the operator's management and business plan. Applications and permits are relatively cheap to get when compared with multi million dollar well cost financing.

Sometimes orders are the beginning of maneuvering to see who actually drills the well. Note that it is not unusual to have many dozens of respondents to applications and many of those industry respondents desire to participate in the pooled well and unit. Sometimes the orders are amended to name other operators and sometimes the orders expire. A risk for mineral owners without control.

Since you are considering selling during the application process, you can avoid the risk of when drilling takes place as long as you know you will get your money by a time certain. Don't assume that an application to drill will result in a well actually being drilled. With new oil business drilling technology in certain areas, wells will probably be drilled but who knows when. In the meantime, lessors or respondents may find that they are HBP for decades. (Read about North Dakota Bakken development)

Short answer is that it depends on the business plan of the operator.

Gary L Hutchinson

Minerals Managment