I am new to all this oil talk and have a few questions. I along with my family, (siblings, aunts, uncles etc etc…) own the mineral rights on a quarter section of land which an oil company has been drilling/working on since December. I have been checking The Million Dollar Way website, and oil and gas division website quite regularly for any information. First - What does it mean when they say - This well is on 160-acre spacing? And secondly, when the well starts producing who will get to share in the royalties? I have been told that we will have to share with the mineral owners of the land on the East and West of our quarter section. And thirdly, The well is out of confidential status, does anyone know of any other websites other than the two I mentioned which will give us good information on the progress of a well? Thanks for any info.
160 acre spacing means a well pulls oil from 160 acres. You will have to share royalties with whomever owns the oil under those 160 acres. The oil and gas commission website for your state will have all the information on permits and oil wells within your state.
Lisa is right, but that 160-acre spaced well might be on a 640 acre unit. The spacing simply means you could only have 4 wells in the unit. Any idea how big of a unit you were pooled into? That will tell you how many acres you'll divide the royalties by.
Thanks Lisa and Reagan. Reagan, what do you mean by pooled into? Would I find that info on the lease? Thanks
It doesn’t mean a well pulls oil from 160 acres, not at all does it mean that. Pulling, or producing from, is not so precise procedure as to do such impossibility and the mineral owner who has minerals adjoining but not within the spacing would also beg to differ.
I apologize for my misstatement. Obviously it's not precisely 160 acres it would be pulling from. Nor would a 640 acre pool be precise as to only those 640 acres. It must be close though, otherwise everyone who has land adjoining a spacing unit would be crying foul if they are not included in the pool. I thought that the various oil and gas commissions put a kabash on such behavior.
So here's another question: why pool multiple wells together? I thought pooling was just the various lots being brought together to make efficient use of well drilling. Like with the Niobrara, I thought 640 acres would be brought into one pooling unit, with one well. Is it because of the lack of preciseness--kind of an equalization among neighbors?
Mineral Joe said:
It doesn't mean a well pulls oil from 160 acres, not at all does it mean that. Pulling, or producing from, is not so precise procedure as to do such impossibility and the mineral owner who has minerals adjoining but not within the spacing would also beg to differ.
Tammy,
Do you have a legal description of your quarter? I presume your ownership is in ND given your reference to the "Million Dollar Way" site.
The ND Industrial Commission (NDIC) Oil and Gas division has a very informative site that has a data base you can search relative to oil activity.The website is: www.dmr.nd.gov/oilgas/
My ownership is in Mont township, Williams County. 155n 102w. If you are near there I can help you.
I recommend you check out the Oil and Gas division website.
Thanks,
Craig
Craig,
Your right I am in ND, Stark County, Township "139" Range "97" And Yes I have been using that site and am considering becoming a paid member to access more of the site.
Thanks Tammy
Hi Tammy: Because your question was confusing, I conducted a quick search on the NDRIN website and found your lease, identified the quarter section involved, and identified the well at issue.
It appears that the well is not a horizontal well being drilled into the Bakken, but a vertical well being drilled into the Lodgepole Formation. Is that correct? Checking the NDIC website and GIS map, it does not appear that the NDIC has issued any spacing order covering your quarter section. Because you noted "this well is on 160-acre spacing," I think you are referring to North Dakota Administrative Code Section 43-02-03-18(1)(b) which provides the following:
43-02-03-18. Drilling units - Well locations. In the absence of an order by the commission setting spacing units for a pool:
1.
b. Vertical or directional oil wells projected to a depth deeper than the Mission Canyon formation must be drilled on a governmental quarter section or equivalent lots, located not less than six hundred sixty feet [201.17 meters] to the boundary of such governmental quarter section or equivalent lots. No more than one well shall be drilled to the same pool on any such governmental quarter section or equivalent lots, except by order of the commission, ....
http://www.legis.nd.gov/information/acdata/pdf/43-02-03.pdf
Your lease grants the lessor the right to pool or unitize the leasehold estate with other lands. I don't understand what you mean when you state you have to share production of this well with owners of the land on the East and West of your quarter section.
North Dakota Century Code Section 38-08-08, Integration of Fractional Tracts, provides, in part, the following:
1. When two or more separately owned tracts are embraced within a spacing unit, or when there are separately owned interests in all or a part of the spacing unit, then the owners and royalty owners thereof may pool their interests for the development and operation of the spacing unit. In the absence of voluntary pooling, the commission upon the application of any interested person shall enter an order pooling all interests in the spacing unit for the development and operations thereof. Each such pooling order must be made after notice and hearing, and must be upon terms and conditions that are just and reasonable, and that afford to the owner of each tract or interest in the spacing unit the opportunity to recover or receive, without unnecessary expense, that owner's just and equitable share. Operations incident to the drilling of a well upon any portion of a spacing unit covered by a pooling order must be deemed, for all purposes, the conduct of such operations upon each separately owned tract in the drilling unit by the several owners thereof. That portion of the production allocated to each tract included in a spacing unit covered by a pooling order must, when produced, be deemed for all purposes to have been produced from such tract by a well drilled thereon....
http://www.legis.nd.gov/cencode/t38c08.pdf
Information available today on the NDIC website states that the well's status is still confidential. What information available to you suggests that you would be required to share production from this well with persons who own interests outside of your quarter section?
Hi Lisa:
Despite the misinformation campaign that is currently being waged in ND concerning spacing units (and the deception being perpetrated upon mineral owners), a spacing unit should be no larger than necessary for ONE well to efficiently and effectively drain the corresponding area of the underlying common pool.
With respect to spacing units for horizontal wells into the common Bakken pool, the spacing units are oversized. Both the companies requesting these oversized units (usually 1280+ acre sized units) and the NDIC which is approving the applications KNOW that it will take a minimum of seven or more wells drilled in each oversized spacing unit to efficiently and effectively drain the common pool. (The Bakken pool has been erroneously defined to include both the Bakken Formation and the Three Forks Formation--thus it is contemplated that a well should be drilled every 660 feet alternating between the two formations.) However, there is NO requirement that the additional wells necessary to drain the common pool be actually drilled. Thus, the companies are allowed to "derisk" many hundreds of UNPRODUCTIVE mineral acres in each spacing unit and hold those unproductive acres "by production" from a single well. This outrageous and unlawful spacing practice dilutes the mineral owners' interests and deprives them of the opportunity to obtain their fair and equitable share of the oil in the common pool.
Lisa said:
I apologize for my misstatement. Obviously it's not precisely 160 acres it would be pulling from. Nor would a 640 acre pool be precise as to only those 640 acres. It must be close though, otherwise everyone who has land adjoining a spacing unit would be crying foul if they are not included in the pool. I thought that the various oil and gas commissions put a kabash on such behavior.
So here's another question: why pool multiple wells together? I thought pooling was just the various lots being brought together to make efficient use of well drilling. Like with the Niobrara, I thought 640 acres would be brought into one pooling unit, with one well. Is it because of the lack of preciseness--kind of an equalization among neighbors?
Mineral Joe said:It doesn't mean a well pulls oil from 160 acres, not at all does it mean that. Pulling, or producing from, is not so precise procedure as to do such impossibility and the mineral owner who has minerals adjoining but not within the spacing would also beg to differ.
Different types of well a required by law to be put on certain amounts of land,you probubly has a Clinton well that is required by law to be set on 160 acre lot, everyone in that 160 acre lot will recieve a porsion according to how many acres are in the 160 lot. If you own 10 acre in the 160 lot you will recieve 10 shares, 15 ares would be 15 shares etc.