We are negotiating an amended lease with a new assignee that addresses allocation wells, which are not contemplated in our current lease. We do have a favorable pooling clause that states that we are entitled to at least 51% royalty on any pooled unit, regardless of the amount of acreage.)
The operator must drill at least one well every 180 days to hold 5400 acres. I am willing to allow allocation wells to count in the continuous drilling program if they drill at least 5,000 ft lateral on our property. The operator countered with 3,000 ft, which I feel is inadequate because we could potentially be sharing royalty with 3 other royalty owners.
We are in Frio County, and most of our wells are in the Eagle Ford.
Does anyone have a good win-win for both royalty owner and operator?
Thanks, Paula Kothmann