Around 1990 W.C.S. amended the original lease to take in more acerage for new horizontal well in Austn chalk which we included a clause that any units drilled our acreage would not be less than 25% of any unit. They sold the eagleford to Wildhorse who later sold to Chesapeake Energy. Wildhorse drilled us two wells Graff 1H and 2H. Around may 2019 Chesapeake drilled an allocation well on neighbors property which took me months to get info on that well. We were paid almost no percentage and only paid then because after year and half I told their shield man it was illegal not to pay within 3 months of 1st sale. Anyway they put Graff 2H well acreage 502 acres which we have 202 acres in that unit.on their 1120 they used our divided 202 acres and divided it again on about a 5% portion of the allocated well. Does our amended lease pertain to them if so shouldn’t our interest be divided on a 202 ac out of 1120 acres
It seems that your 202 acres are in a 502 acre unit for the Graf wells. Presumably this is a formal unit, with a Declaration of Pooled Unit filed in the deed records. Unit royalties are allocated based on the total acreage, so you would be paid on the 202 acres out of 502 acres - decimal = 202/502 x royalty rate, assuming you own 100% of 202 acres.
Allocation wells are different. Royalties are based on the length of the productive horizontal lateral under your tract vs your neighbor’s tract and not on the total acres. The productive lateral is the distance from the first take point (frac hole) to the last take point. The completion report will tell you this distance.
Then you see how many feet are under your unit vs your neighbor’s land. And then the portion allocated to your unit is paid by the unit ownership.
For example, suppose your unit royalty decimal is 0.050000. if the horizontal lateral is 5000 feet and only 500 feet is under your unit, then that is 10%. So 10% of the production goes to your unit and 90% goes to your neighbor. This means that your royalty decimal for the allocation well is 10% of your unit decimal. 10% x 0.05000 = 0.005000. This can be complicated and there is information about allocation wells on this website. If you post state, county, the other well name and current operator, someone can help walk you through the information.
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