Burlington Resources has made a application for a spacing exception permit. If Im right our land is unleased so Im thinking that the land next to ours is. Is it in our best interest to give it or to protest it.
Hey, Gary -
I would advise against protesting.
In Texas, by Regulation the company has to stay 467 feet away from any competitor's lease or unleased properties. That applies to all Surface Locations, Bottom Hole Locations - probably applies to any Lateral Corridors as well.
The concept was born out of efforts to protect Landowners from having oil and gas drained out from under their lands by wells drilled on their neighbors' land. Where they came up with the figure 467 feet, I honestly don't know - probably based upon some Surveyor's measurement (so many links or chains or something).
In a Rule 37, Exception to Location Case, the company is asking permission to move closer to those lines - something that is quite frequently necessary in areas like the Barnett Shale, where the companies are drilling in urban areas and Drill Site Locations are restricted to lands approved by the local governments.
Bear in mind that any development (successfully completed wells) in the area around your land will increase the value of your land / mineral interests exponentially. If that well comes in, I would venture that you will be having a very good year - with many more to come.
Instead of protesting, you should be out in your front yard running around in little circles, madly shaking Pom-Poms and shouting "Drill Baby, Drill!"
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Will someone please answers these questions I have regarding the Rule 37 matter? What happens if I do not protest? Does not signing a lease automatically make me an unleased, pooled interest owner? Do I have to sign a lease in order to guarantee any mineral rights I may have?
The more questions I ask, the more terms I learn. I understand the waste issue and the “dough-nut” hole property owner. However, am I also an unleased, pooled interest owner? If I do not protest the Rule 37 case and do not sign a lease, does Burlington have to set aside an escrow that would include any mineral rights I have?
Dear Mr. Masters,
To answer your previous question, NO, you are not an unleased pooled owner. Burlington is taking your minerals and paying you no royalty, no escrow, no nothing.
In Texas, 99.99% of units are "Voluntary Pooled Units"
In order to be voluntarily pooled, there must be a pooling transaction.
To learn more about these Texas idiosyncrasies, please check out the following blog posts:
I, nor anybody else can give you any strategic advice, since there is just not information to develop a strategy to commercialize your assets. By the way, did Burlington or anybody ask you to lease and your turned them down?
After you read the third blog post above, there is GREAT danger of you being strongly drained if Burlington is drilling a horizontal well and the RRC allows them to frac anywhere near your lands.
You do have the option to prevent the migration of hydrocarbons by drilling your own well. Protect yourself if you feel as if you are being drained. Courts have said it a thousand times in Texas.
If we have not received an lease offer from Burlington, only the Rule 37 Application, what is the best next step for us to pursue?
You are giving sound advice. One thing to keep in mind is "has Burlington followed proper protocol in notification of offset owners?" The rule provides that the requestor has to notify all "owners of record" of affected tracts. Failure to do so flaws the application. Just a little leverage.
I’m not sure exactly what an “offset owner” is, but Burlington is still in the process of researching all of the heirs. I think you both have responded to questions from Natasha Haskins, who is also one of our relatives. There were approximately 80+ names on the Rule 37 applications that we received, but to my knowledge they are still doing research.
Thank you, Mr. Cotten, for you great advice. My siblings and I understand the danger of possibly being drained if Burlington drills a horizontal well and the RRC allows them to frac anywhere near our interest. My siblings and I want to proceed with the protest. However, one of our cousins indicated we don't have a cause to protest because we are not the land owners. We own a percentage of the minerals rights. Should we protest Burlington's request to drill horizontal well even thoug we are not the land owner?
I am once again needing assistance in understanding this process. RRC recently waived a hearing and approved a permit with a (npz) no perf zone restriction. The (pp) proposed penetration is west of the land in which I have an interest. However, the revised plat shows the (ftp) first take point is on land in which I have an interest, and the npz is southeast of the land in which I have an interest. Doesn’t this mean the operator will take resources from the land in which I have an interest in spite ofthe npz?
Mr. MastersIf truly the first take point is under your land, you are part owner of the well, if they perf that section. I would sure give Burlington a free lease with 1/5 royalty and required pooling.