Lease Agreement: Well Tract Section

Concerning acreage around an oil or gas well.....

a) As to well tracts for oil or gas wells that are completed vertically, each Well Tract may not exceed 160 or 320 acres plus 10% tolerance.

Which of these figures (160 or 320 acres) benefits the land owner (Lessor) more and why?

This isn't a test; I'm just oil and gas challenged.


It should read "160 acres for oil or 320 acres for gas". The clause is poorly written as quoted. Benefit to the mineral owner is to get a well drilled and producing and rely on the regulators to make the best decision under long established rules. If you are negotiating a lease clause, get it clarified and also set a limit in the case of a horizontal well or wells. The benefit to the owner in a low acreage spacing is the release of unpooled acreage after the lease expires.

Thank you, Gary. Appreciate the help.