Unit Size

Shales Cana Woodford Shale (AKA Anadarko Woodford)
1

I'm wondering what the other folks on this forum think about the increased unit sizes the state of Oklahoma has recently approved. Is this a good or bad deal for royality owners?

I understand you are paid in proportion to the number of feet drilled in your unit. Does this mean that if 5,000ft is drilled in your unit and only 1,000ft in mine that your proportionate royality is 5x mine? Or are the units combined and everyone gets a smaller piece of the pie, with the theory being that over time the pie will become larger due to more wells being drilled?

The state says this will be a good deal for all parties. What do y'all think?

2

I think that instead of a 640 acre unit the oil company will have a 1280 unit. So, hopefully if they drill 2miles horizonally the well will produce twice as much so you will get the same royality as if they had drilled 1 mile through a 640 acre unit. Hope this makes sense.