Can an operator space a vertical unit at 320 acres in Oklahoma and do spacing units always follow section lines? Currently, we have a vertical well placed on our property and the property is located at the edge of a section. The oil producer spaced the unit so that the vertical well is in the northwestern part of the spacing and is not in the middle. The producer then drilled 3 more vertical wells within a 1/4 mile of each other and is in the process of spacing them all separately. Shouldn't the royalty owners that are closest to the well be allowed into the spacing units? Therefore, shouldn't we be unitized with the other 3 wells that are located within a 1/4 mile of our well? I hope that someone can answer my question and would greatly appreciate any and all replies.
Thanks.
Vertical wells follow section lines. If a formation is spaced at 160 acres, then only the owners under that spacing is covered. Several wells can be drilled in that spacing and only the mineral owners in that 160 will share in production. Same for a 320 acre spacing. I have two wells in the same 40 acre spacing.
If I am incorrect, someone please inform me.
Don't know much about Oklahoma; but, IMHO, the real issue here is "how many acres can they hold (HBP) with only one Vertical Well"! Looks to me like these guys are trying to capture as many acres as possible with single vertical wells, no matter how deep they are trying to produce.
Lera,
Think in 3 dimension with vertical wells. Gas wells from a predominately gas formations need more acreage as the gas flows to the well bore more readily. Lease language and OCD, at permit granting. determine who shares in offset wells that may produce from a deeper or shallower gas or oil well. Drilling permits, completion permits and lease language determine shares of production from each well for respective mineral owners.
Operators can not see into the subsurface and are allowed to apply for changes in spacing depending on completion permits so that the operator can maximize the return from the great risk investment in drilling and testing each well. In many cases, production will be "held behind pipe" for completion at another date.
In a multi-production zone area like you are in, the OCD usually has the final approval of each well spacing unit based on physical attributes of the formation being developed. If your lease language allows you to be in any particular well, you probably will be included but it will be based on a well by well determination.
If enough wells to the same formation in a contiguous area are drilled, the operators are allowed to form a large unit for efficient development of the resource. In that case, formula for the sharing of revenue is a whole different and complicated ball game. At the end of the day, the OCD is mandated to make fair decisions that "conserve the resource and protect correlative rights.
Texas has a different land system where sections are not similar but the overall concept is similar.