Pooling and royalties

Oil and Gas Leasing Help
1

I know how and why they pool tracts of land, but how are the royalties paid out? do you only receive the royalty for your acreage or do they account for every well that is producing? a family member asked and couldn't really tell them the answer. I know someone out there can tell me the answer. thanks!!

2

Susan:

If your minerals are located in the spacing unit, you will receive royalties from all wells drilled within that spacing unit. Of course your royalties will be based on the number of net mineral acres you have as opposed to the amount of acres in the spacing unit.

3

Thanks, that helps. how they decide how many acres are in a spacing unit?

4

Susan:

The operator makes an application to the appropriate State Agency (in the State where the minerals are located), then a hearing is scheduled posting the spacing unit size and mineral description area, a hearing is held and the operator is granted or denied the unit size, etc. I have never known an application to be denied as most issues are worked out prior to the hearing. In North Dakota and Montana, the norm is 1280 spacing, some 640 and a few 5120 spacing units. Other shale plays in various States may possibly have less acreage spacing units depending the type of drill. Hope this helps.

Susan E Hallmark said:

Thanks, that helps. how they decide how many acres are in a spacing unit?

5

How do you find out what the spacing unit size is for a specific location in Oklahoma? Is it somewhere on the OCC website?

Thanks.

6

Billy:

I'm not familiar with the OCC website but in North Dakota, the information can be obtained via the GIS map on their website.

Billy Bates said:

How do you find out what the spacing unit size is for a specific location in Oklahoma? Is it somewhere on the OCC website?

Thanks.

7

Billy,

If you can give me the section, township and range I can look it up for you. I can also give you instructions for navigating the OCC databases but the fastest way right now would be for me to look it up for you. If horizontal drilling is anticipated in all likelyhood the spacing will be 640 acres. Spacing Orders are based on an application made by an operator to establish a unit.

8

Michael,

Instructions would be great since I have several different locations I would like to look up. Once a spacing order is appoved, does it always stay that way or can it be changed again? Thanks Michael.

9

Billy, Go to the OCC homepage: http://www.occeweb.com/index.html

Go to divisions, oil and gas, click on databases. The database instruction page will open. Follow the procedure very closely or it will trip you up. When that has been done scroll down and click on Case Processing Web Application. A search box will open, follow instructions. This thing has a lot of quirks to it, so feel free to ask if you have any problems with it.