Mineral Royalty Payments

In Oklahoma do royalty payments go only to owners of those minerals on the specific quarter on which a horizontal Well is located or to all on that section?

Hey Jrich! Most wells in Oklahoma are drilled in a “Drilling and Spacing Unit” that is established by the Oklahoma Corporation Commission (OCC). This means that a well operator will ask the OCC to declare what lands are in the unit and (therefore) who gets paid for a given well based on the tracts in which they own. Sometimes those units are 160 acres - in which case only owners in that quarter section will be paid. Other units are 640 acres - in which case all owners in the section will get paid. Historically there have been units of many sizes / descriptions although most of the new horizontal development is done on a 640 acre basis. As an example, imagine a well that is located on the surface of the NE/4 and the subsurface horizontal wellbore is drilled south into the SE/4. If this well is drilled in a 640 acre drilling and spacing unit a common arrangement would be that all quarter sections would get royalties. Hope this helps!

And to clarify, only those minerals within the D&S unit that have perforations are paid. Frequently, the original documents may indicate a 50/50 split for a two section well, but the actual final orders based upon the perforations determine the royalty split. A fault may be found that cuts the section and well has to pull up short.

The particulars of each well are clearly laid out in the OCC documents that are mailed to every mineral owner that they can find.

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