Does anyone know how to look up the Rule 86 on the Texas RRC web site?
Also, what are ideas and opinions about this in reference to horizontal pooling in Texas?
Basically what is a mineral owners options and protections from the very large unit size that are way over the 640 Acre + 10% vertical or directional unit size?
Dear Walter,
Rule 86 is attached. The better and easier way (since most units in Texas are voluntary in nature) is to limit the unit size by some formula related to drainhole length. Remember that proration units, density (spacing) units, etc. have no effect on title. Only the pooling transaction, MIPA or a community lease or fieldwide unitization does.
In the pooling transaction in most unaltered lease, it allows unit sizes to be increased to conform to those "prescribed or permitted" by the regulatory agency in order to obtain a full allowable. Strike "permitted"
Here is some sample language from one of my forms:
(d) If the well is classified as a horizontal well under the Rules and Regulations of the Railroad Commission then in effect, then the maximum size of the Earned Acreage Unit shall be determined by the following formula: 40 + .024 X L, where L = the length of the horizontal lateral component of the drainhole of the well, from the first take point to the last take point.
You can go to
rrc.state.tx.us/data/online/index.php
once you get into the site, you will need to see which one has the rules and click that box.
Regaring horizontal pooling. It is my understanding that an oil company has to apply at the RRC for spacing. It is approved according to the amount of oil and gas that may be in that area. If the well is going to be a good producter, it may be on smaller unit sizes. As a mineral owner, you can go before RRC and prove that the unit sizes need to be smaller, but usually they will listen to the oil company as they usually have all the facts. You need to call RRC and find out the date and time of the unit spacing. Usually their is an order # and that is what they go by.