I'll try make this as uncomplicated as I can. We have a mineral lease in Weld County with a major operator who just came into the picture having bought our original lease. It was determined that another major operator had drilled a deeper well 156 feet from our old non-producing well, produced and sold oil/gas but never notified any of the original mineral owners. The operator who drilled and discovered oil says the issue of executive rights is at question and in order to pay royalties they need old probate documents, etc. This land has been leased many times over the years and royalties paid until it was abandoned.
Meanwhile the operator who recently purchased the lease has been notified of the proximity of the adjacent well. They, their Attorneys I should say, are looking into it. These are two big companies and this issue is peanuts to them I am sure. However just for the sake of conversation,...assuming that the probate becomes a non issue the question is:
At the end of the day, who would be on the hook to pay royalties? The owner of our lease or the operator who obtained a lease from the holder of executive rights, (still an unsettled question)?
What I have posted below, is 2 sections of land that I split into quarters, listed as section 1 and 2. A well is drilled in section 1, low SE corner, and the direction of the horizontal ends in the middle left of section 2 SW.
Question is, if a mineral owner owns a 1/2 section of land in Section 2 NE and SE quarters; and this horizontal well does go though the SE portion of his (minerals) and surface land; does the entire 320 acres of minerals he owns, get figured into his royalty of well, or only the 160 of the SE quarter, that the well actually goes through?
Sorry if I can't explain it clearer, and also, sorry to Robert Tofson for highjacking his thread, but I couldn't find another topic in the General Mineral Rights Discussion categories, that I'd place this question.
Snues, it depends on pooling. If it is in ND you can go to the NDIC O&G website and look on the GIS map, select find section, input the coordinates and on the upper right, select drilling/spacing. In ND the spacing is the pool, so yes, in your case with a 2 section long lateral, all the acres inside the 2 section spacing count. Your neighbors will be paid from your oil, and maybe one day, decades in the future, you will be paid from theirs. You can have overlapping spacing pools also for verticle wells inside a 1280 and wells drilled on section lines. PM me anytime.