Brand new to all of this. Looking for all resources to gain knowledge to better understand leases and how all this works. I have a mineral interest in 4 tracts.
Received an offer to sign a production sharing agreement for a couple of sections on my lease. What is the purpose of the production sharing agreement? Why sign if they are already going to drill?
First step: don’t sign until you call attorney Wade Caldwell to be sure optional provisions favor you. Second step: find this article through the search field, “I May Own Minerals, So Now What?” Third step: join NARO and take advantage of member learning resources. Fourth step: find out who shares your interests–for leverage and monitoring. Fifth step: explore ‘Mineral Help’ links at the top of The Mineral Rights Forum web page.
Happy New Year!
Thanks for the useful info. Will continue to research. How would one go about finding out who all shares my interests? I am not local.
Purpose of PSA is to set out allocation of production among the various tracts underlying horizontal wellbore. Most frequently the allocation is by fraction of number of feet of productive lateral under your tract divided by number of feet in productive lateral. Sometimes it is by acreage. Productive lateral is length from first to last take-point. There are discussions on this site. You do want to make sure that there is not an adverse change to your lease, but most of the PSA language will be standard.
Curious if TennisDaze or someone might know how is it possible to have someone drill two wells on our property which will be horizontal wells through part of our property but not draw any oil / gas from our lease/property? Thank you.
One possibility is that the well location is “off lease” and on your minerals. Then the vertical wellbore and some of the horizontal wellbore would be under your minerals, but the first take-point would be on adjacent land. The productive lateral is between the first and last take-points. This is the portion of the wellbore which has been frac’ed and so has ‘holes’ which allow oil and gas to flow into the pipe. The well completion report will have a plat showing where the first and last takepoints are. If you post the well information (e.g. operator, well name, county, state and API number), then someone will be able to look at the permit and completion plats and explain them to you. In rare circumstances, where 100% of minerals are not under lease, the frac points could stop before the unleased tract and start again after the unleased tract. Usually this possibility is resolved before the frac and the tract is included.
Hi - we signed a production sharing agreement with Centennial and they have drilled and completed 6 horizontal wells on an interest in Reeves county; section 38 to be exact. The “Barracuda” wells. Our attorney, approved the language in the PSA. Encourage you to obtain legal council prior to signing. There is a directory link above which may be useful.
This topic was automatically closed after 90 days. New replies are no longer allowed.