Section19 13N 6W

#1

We signed a 3 year lease 12/17. No drilling or word since. Just got notice they are going to court on 2/12/19 I am assuming to combining our Section 19 13N 6W with Section 30 13N 6W.

Including in the letter is what they are proposing as to drilling depths and all.

My question is

  1. Since I signed a lease for our one section acreage not knowing this whole thing was going to grow to a two section deal consisting of more people who are mineral owners with a total of 640 acres, will I perhaps receive additional bonus?

  2. Will this proposal they are now going to do in the end be a better deal for me or worse since they added more acreage?

  3. Is this common to use two sections for one drill or is this often done?

  4. Can anyone look this up to see what my prospective income may be? 1/4 of an acre my share of my original lease which including nothing of having it all drilled into two sections.

Thanks Stacy

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#2
  1. You will not get an additional bonus.
  2. How much of the well is in each section will determine your decimal interest. On the one hand, it is a good deal for you since you will get a well drilled.
  3. Very common to use two sections. Much cheaper to drill one well over two sections than two individual wells.
  4. Your revenue will be derived from the following formula: net acres/spacing acres x royalty x % perforations in your section. At the moment, the well looks like it will be 50/50 in each section. The price of oil and gas for each month is another factor. At one-fourth of an acre, the answer is “not much”. However, if there are multiple wells, then your get several “not much” wells which can add up to “some”. Example: .25/640 x royalty x .50 is your piece.
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#3

Thank you! Gosh that was a helpful, thank you for looking it up too. If you can see after this court date on 2/12/19 are you able to estimate how long it will be before they start drilling?

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#4

Totally depends upon the operator. Some of them start the next week, some drag their heels. Usually depends upon their rig schedule and what that timing is. The permit gives a time frame that it is good for. The pooling order tells whether they have 180 days or 365 days in which to spud. That is a good clue.

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#5

Whether or not there is a pooling order, your lease is tied up for 3 years, then later if held by production. However, a pooling order is a good clue that they will begin soon as Martha stated.

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#6

The original pooling order was 12/17 but no drill and was for only the one section, I was confused when this next letter came the other day adding two sections, and that is where my confusion lies due to the fact my original lease was for just my ownership of the one section and there was a detailed list of what they were drilling for and how far and all, now this is a whole different deal they have combined two sections so to me the original lease that I signed was for a who different thing and then they throw this on you.

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#7

Happens all the time as new information is obtained by the operators. Your lease will still stand for the complete three years. If they drill and they have production, you will get your fair share. Actually having a two section well is sometimes more advantageous because they can perforate more interval. Also much cheaper to drill a two section well than two one-section wells.

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