Allocation Well Calculation

Division Orders
1

Is the plat that’s listed on the RRC completions website which says “Final As-Drilled Allocation Well Location” the one I should use to calculate my interest? And is the following formula correct for calculating an allocation well interest in Texas:

[Lateral length of my tract / total combined lateral length of all tracts] x [NMA’s owned / gross acres in my tract] x [royalty rate]

When I use this formula for each of the 8 wells on my Division Order I come up with anywhere from .000068574 to .0001464288 more for each well than what’s listed under revenue interest on the Division Order. Not a large difference but why would it be off at all and why in such varying amounts from well to well? As far as I know there’s never been any dispute over what I own within my tract. And the same three tracts are included in all 8 wells with none of the plats showing any no perf zones.

1 Like
2

Sometimes allocation is done by feet of wellbore, other times its percentage of perforations. You should just call the division order specialist and ask for their calculation for your interests on the division order. Theyll more than likely be happy to help. Whether you like how they calculated it is a different story sometimes

2 Likes
3

Be sure to use the productive lateral length figures (between 1st take point and last take point), excluding the toe and top. Sometimes the D.O. analyst will use an earlier version of the as-drilled plat or will apply a shortened fractional decimal. The calculation will also be different if your minerals are in a unit and the allocation well crosses the unit and non-unitized acreage. Then you apply your unit DOI.

2 Likes