What does it mean when the surface location, (SL or pentagon symbol on the Texas RRC Public Viewer Map), is in one section, but the horizontal well line, (and green dot), are in another section?. How does this effect royalties?.
Thanks. I just read up on allocation wells. Seems fishy. My section, (418-Yoakum County, TX), has recent producing wells and now 2 new wells are being started, but the surface location drill site for those are just over the line in Section 399. The well-bore track is 98% in Sec. 418. I can’t think why they would do that.
The drilling pad location might be outside of the section because of more favorable surface use terms reached with the owner(s). The company drilling your well may only have surface use rights in the adjoining section. Another company may have leased the minerals. Another consideration might be that since a cross section of a horizontal well resembles the letter “L” with a radius connecting the vertical and horizontal segments, a sweet spot/target could be concentrated in your section and the off section site would allow the company to drain your section more completely. Just my two cents. Maybe an expert will weigh in with comments.
Do you know that the well you are talking about is permitted as an allocation well? It’s not unusual for wells that are part of a pooled unit to have the drill site, which the unit plat shows as the penetration point, located in one section but the horizontal leg of the well located is an adjoining section. In those circumstances the unit would not include the drill site and the production would be allocated based on where the first perforations were made in the horizontal leg, which is shown on the plat as the First Take Point.
It sounds like you are familiar with RRC’s website. Pull up the permit for the well and then go to the bottom of the second page where the attachments are located. You should find the plat of the unit there and be able to determine where the first take point is located.
I see nothing that says it’s an allocation well. The permits or plats, (W-1 Data Query), say:
- The “penetration points” are on lease, (in my section).
- The “first” and “last” “take points” are on lease, (in my section). The only thing off lease is the SL/surface location. Twice it says it is not pooled or unitized. This doesn’t seem like the typical allocation well. I wonder if they did this so as not to disturb the agriculture of the surface owner. The section is quartered into 4 agriculture circles… A new drill pad would damage one of the crop areas. Just a thought.
Sounds like a pooled unit. If the unit plat shows the drill site/penetration point and the take points on the horizontal leg are both within the boundaries of the unit then the fact it includes acreage from two different sections shouldn’t make a difference. Everyone whose acreage is included in the unit will share in the production.
Thank you for your response. But it says on the “Plat”-W-1 form; “Is this a pooled unit?”…it’s answered with “NO”.
The drilling pad location might be outside of the section because of more favorable surface use terms reached with the owner(s). The company drilling your well may only have surface use rights in the adjoining section.