Limits to Spacing Units in N.D.?

Oil and Gas Leasing Help
#1

My family has signed a lease agreement with Brigham Oil & Gas recently for property in Williams Co. North Dakota Sect 6&7 T154N R100W. The NDIC website shows case #17149 Application of Brigham Oil & Gas for an order pursuant to NDAC 43-02-03-88 pooling sect 6&7 T 154 N R100W. Case #17155 is a application by Brigham Oil & Gas on each 1280 acre spacing unit within the zones II & III of the Williston Bakken Pool Williams Co for up to eight wells on each unit. So far so good.

Recently Triangle USA Petroleum Corp. applied for an order pursuant to NDAC 43-02-03-88.1 pooling all interests in a spacing unit described as Sect 1 & 2 T154N R101W AND sect 6&7 T 154 N R100 W Williams Co. authorizing 14 wells on 2560 acres.

My question is what limits if any are there to the size of these spacing units? I haven't heard of larger than 1280 acres. It would seem that large tracts comprising many thousands of acres could be "pooled" in one spacing unit and then held by production after the drilling of one well in the unit if there are no limits. I'm just trying to understand what is going on here with Triangle's application and what it means (if anything) to lease holders in those spacing unit(s)?

Any clarification would be much appreciated.

#2

Roger, Apparently 1280 is the limit but if you read some of the causes in this docket posting you will see that Operators are applying for and being granted exceptions. If they treat it as one big unit seems the royalty interests could get pretty diluted. In Okla. they recently approved 1280's but the allocation to royalty owners is based on the original 640. This could also be detrimental to owners if they perforate all of one 640 and only part of the other. Hope this makes sense.

https://www.dmr.nd.gov/oilgas/dockets/2009/docket062409.pdf

#3

There is no legal limit on the area pooled for a drilling unit. In North Dakota there are already several 2,560 acre units (four sections) that I'm aware of, and I believe I've seen requests for a few even larger than that. Though 1,280 and 640 acre tracts are by far the more common.

Don't know exactly what is going on with your minerals. There are several possibilities. Best guess is Brigham has a majority of the leases in sections 6&7. However, Triangle likely holds leases in sections 6&7 also. Triangle is proposing their 2,560 unit to the NDIC under the premise it has the most economical and effecient way to produce those lands (6&7) by combining them with the two sections to the north. If this is the case, Brigham will probably contest Triangle's claim and it will be six months or more until the NDIC determines who they'll allow to drill your minerals. So "what it means" is that this may take awhile to be sorted out.

#4

Roger:

Ditto's to the post by Eastern MT as I know of several 2560 acre units in this Western ND area. This will most likely be determined over a hearing on the matter. I was not happy years ago with the 1280 spacing as 640 was always the norm. Now that I'm just getting used to accepting the 1280, they start with the 2560.

#5