Sharing Wells, Splitting Royalties

Does anyone know how royalties are split when a horizontal goes through multiple peoples mineral rights?

Also, after the contractor gets approved to drill, how long before the well can be operational on average?

they measure the total number of feet along the line, and divide by the approximate amount in your lease. I have small undivided acreages in complete sections in Upton County, and they literally use the plat for the "as drilled" well, and in my cases, use about a 2/3 inclusion factor between my section and the other one (in which i have no interest). They use the take points, i believe, so just because the well starts in one place but doesn't include a take point, doesn't mean it gets any allocation. My only experience with having a non-take point was when they offered some money for a pad in my land. When i complained, they moved the drill site within the next section.

As to your second question, times can vary considerably. Some wells show on the RRC as approved sites never get drilled. I have found some wells in production for nearly a year before i get a division order and money, but they pay back to production. Many of the operators are overwhelmed with the number of wells getting drilled and swamp the back offices. I have had "estimated" DOs that they pay on, and then reverse when they get complete drilling title opinions for. I have found most land departments within the operators very helpful in showing how they derived the interest.

Dear Mr. Huston,

If the well drilled is a horizontal wellbore and an unit is formed, then all share in the well based on their unit participation factor, that is to say, how many net mineral acres that they own in the unit, divided by unit size. The Unit Participation factor is then multiplied by the royalty rate to determine the pay decimal. Go here for a more detailed explanation.

On cross unit wells, or wells that have Production Sharing Agreements in effect, the terms of the Production Sharing Agreement rule.

A permit in Texas goes stale after 24 months. So if a well was recently permitted, it could be drilled under that permit within 2 years. After completion and when the well is hooked up for sales, you will receive a division order and generally get your first check several months after that.


Buddy Cotten