I understand that this may be a simple question, but I was just trying to get a quick Yes/No after wading through pages of legal-ese from several google searches.
My family owns pooled mineral rights on +/- 300 acres in Zavala county. We currently have two wells on the land paying royalties, as well as another nearby well paying royalties for a small snippet at the corner of our property.
The oil company is preparing to drill two new wells, and my sister is afraid that the production from these new wells will not pay the family any royalties, because our acreage was already “assigned” to the currently producing wells.
Is it possible for the assigned acreage of the new wells to overlap with the old wells? Can the acreage allotted for multiple wells overlap?
I have been able to understand that each well has an “assigned acreage,” but I have not found a clear answer as to whether parts of the same acreage can be assigned to multiple wells… perhaps drilled at different depths?
Many thanks to anyone who can help me make sense of this. J.
In Zavalla County I’m assuming your mineral interest is included in what is called a pooled unit that includes those first two wells. What are called allocation units are common in West Texas and other areas and the answer could be different in those cases…
If your mineral interest is included in a pooled unit, and the new wells are drilled within that same unit, then you should have the same royalty interest in those new wells as you have in the first two wells.
You are right that units can be formed that cover the same acreage but are limited to different producing formations or depths, so you need to confirm those new wells were permitted in the same producing unit you are in.
If you’ll post the location of your acreage (survey abstract number) and well operator someone can pull up the Railroad Commission map of that area and show you the unit plats for those wells.
I have been looking at the GIS map, and found permitting info for all four of the wells that are on our property, including the plats. However, I am not at all knowledgeable of what all that information means.
The first of the proposed new wells indicates that it is “Pooled/Unitized,” while the second proposed well indicates “No” under “Pooled/Unitized” Also, the second lists “Allocation” under “Horizontal Wellbore,” while the first well permit left that spot empty.
The new wells are permits # 50733396 and 50733403
For comparison, the older wells are permits # 50733074 and 50733075
The info I am talking about is on the Lease Name page.
Based simply on what the Plats look like, it seems that the first well is going to include a lot of our acreage, while the second one will only have 11 of our acres included in its nearly 1220 acre assignment.
My gut feeling is that the new wells are going to pay the family royalties… one of them for a lot of acres, and the other for pretty much pennies per month (per family member).
If anyone looks at that and sees that I am wrong, please let me know. Actually, let me know if I am right… it would ease my sister’s mind to hear it from someone other than her dumb brother. LOL
Probably bad news if your sister will give more weight to ideas from unknown guy on the internet than to your’s but, for what it’s worth, I agree with what you are thinking on both of those new wells.
IMO your families acreage is currently part of two producing units, the Powell Zav A and Powell Zav B, and the permit for that first new well you are talking about (the Powell Zav A 2H) shows it being part of the same 365.88 acre pooled unit that the earlier Zav A 1H well was completed in. On that basis your unit factor on the 2H should be the same about 58% as it is on the 1H.
One thing that might be confusing if you looked at the unit boundaries shown on the plat that was filed when the 1H was permitted and were comparing it to the new plat filed with the permit for the proposed 2H, the Zav A unit originally extended further north covering 552 acres but that apparently was reduced to 365 acres when the first well was completed and the unit designation for the producing unit was recorded.
That second new well was permitted as an allocation well. The permit includes a note saying
Allocation well between existing Robert Walker Unit ZAV A (01-17819) & J&M Holdsworth Unit ZAV G (01-17495). Acreage and Production will be proportionately assigned and reported to each of the existing leases based on perforated lateral length within each lease.
Based on the plat it looks like the PP (penetration point) for that well will be on that 11 acre corner of your property but the FTP (first take point) or the first producing perforation on proposed horizontal leg may be just outside of your property in which case you may not even receive the penny’s you mentioned.
If I’m off base on any of this hopefully Tennisdaze or someone else will point it out but to be sure you might try emailing your question to Exco’s royalty relations section.