Dear 6GT,
Since your profile is set to private, who knows where your land lies. Since you are proud of your heritage (rightfully so) and you used terms particular to Texas law, I can only guess that your question involves Texas lands,so my response is limited to Texas lands. if your lands are elsewhere, well---you faked me out.
The lateral length is the most determining factor in proration unit size. The reason the proration is important i that unsophisticated landowners will allow voluntary pooling based on the size of the proration unit prescribed or permitted to gain maximum allowable. The size of the proration unit in Texas has NOTHING to do with its drainage radius. The acreage designated on a Form P-15 and the attached plat to show the acreage assigned to the well for proration purposes where field rules provide for the setting of allowables on an acreage basis, in whole or in part. The proration unit is designated after the well is drilled and completed, and only productive acreage can be assigned to a proration unit (note: not drainage radius. read carefully). The designation of a proration unit can be changed at any time. A proration unit has no title significance.
EOG proposed general field rules for the Eagleford last year based on an allocation formula as follows; Proration units for horizontal gas wells may contain additional acreage, determined by the following formula: A= (L x 0.16249) + 320 acres, where L = the horizontal drainhole distance measured between the first take point and the last take point.
Proration units for horizontal oil wells may contain additional acreage, determined by a separate rule previously adopted by the Commission, Statewide Rule 86. Under that rule, an operator is allowed to assign additional acreage to a well, depending on the length of the lateral. For the proposed new Eagle Ford field rules, for example, operators would be able to assign an additional 160 acres to the proration unit if the horizontal drainhole displacement is between 2,482 feet and 3,308 feet; an additional 200 acres if the horizontal displacement is from 3,309 to 4,135 feet; and 240 acres if the horizontal displacement is from 4,136 to 4,962 feet.
There was so much opposition, EOG removed their request.
To further confuse the uninformed,there is no such thing as equitable pooling in Texas.
If you think that you are being drained, protect yourself. This is a rule of capture state. If you think a MIPA action will help you, forget it. First, it is incredibly expensive. The burden is on the landowner to prove drainage, which they have been able to do exactly 118 times since 1964. Also, the savvy oil company will tie up the MIPA action as long as possible, because the MIPA action, if granted, applies to the DATE of approval of the MIPA action - not retroactive. The dragging on of a MIPA action actually pays the legal bills to keep it going! Amazing.
The average size of proration units in the Eagleford Shale vary from 40-640 acres. For those who think that I have no idea what I am talking about, here is the link to the FAQ section of the RRC website that addreses that question:
This was last updated a couple of weeks ago. If you can read carefully, there is no standard size for proration units in the EagleFord, it is on a field by field basis.
My credentials include speaking before a landman conference several years ago on pooling and unitization in Texas. Attendance at my talk qualified the attendee with continuing education credits from the Education Director of the AAPL.
Discussing non Texas law on a Texas issue is like tossing out Oklahoma law on a Montana issue.
So, Texas does not have oversize spacing units. They have voluntary pooled units which are agreed to by the landowner at the time the lease is executed, in most cases. A landowner can actually agree to a voluntary pooled unit of any size!
In most cases, the landowner have no clue what they are doing, because they were not properly represented by someone knowledgeable in the industry.
PS. Ms DG. The shales have high porosity. Not low like you said below. Permeability is the problem.
DG said:
Hello Texan:
The length of the lateral leg (i.e., horizontal bore) is only one consideration. The determining factor in determining the size of a horizontal well spacing/drilling unit is the AREA that an AVERAGE single horizontal well will drain from the common reservoir. Horizontal wells being drilled into the Bakken Formation (in ND) and the Eagle Ford Formation (in Texas) are targeting rock formations with extremely low porosity. The Texas regulatory commission has acknowledged that in such formations, it is necessary to space the horizontal wells very close together. How close together depends on the average length of the induced fractures. If the induced fractures extend 400 feet away from the horizontal bore, then it would be appropriate to space the wells a minimum of 800 feet apart in order to prevent waste, protect correlative rights, and to achieve the greatest possible ultimate recovery. Thus, the length of the horizontal bore (which could be nearly 2 miles long) is only one factor.
Your comment that it appears that companies are trying to get the largest units possible to tie up acres is certainly true in North Dakota. Companies are seeking 1280+ acre spacing units (i.e., at least one mile or 5,280 feet WIDE by two miles or 10,560 feet LONG) for a single well when it is known that it will take many more wells (i.e., 7+) to effectively drain the unit. Many companies and regulatory authorities have openly stated the reason the units are so large is to enable companies to secure their leases "by production" from one well with the "plan" (but NOT the requirement) to come back later and drill 7 or more additional wells in each unit. Based on an extensive review of the law, I firmly believe the establishment of oversized spacing units is both unlawful and infringes upon the rights of mineral owners.
There are many informative resources on the internet concerning the pooling of interests or tracts and the spacing of wells. It takes considerable study to fully understand both the legal and practical ramifications that pooling and spacing issues may have on your particular interests.