Hello, I’m new here. I own some Mineral Richts in Richland County, Montana of which Kracken Oil is leading from me. I received a “Application for Overlapping Temporary Spacing Unit” and I know nothing about this. Would someone on this Forum let me know what effect this has on my lease and what is it’s purpose? Do I need legal representation on this? Please can anyone help me on this? Kindest Regards, Gerald Reynolds II
An overlapping spacing unit is a mechanism that allows an Operator to drill a well on the border between two existing spacing units. The new well will be shared equally by the Owners on either side.
So if you had 100% of the royalties on one side of the fence and 0% on the other, you would have 50% in the new well. This applies to the new well only. Your royalty in the existing wells is not affected.