It appears to me that the surface area included in our division order is equivalent to the surface area included in spacing permit issued by: STATE OF MONTANA, DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, BOARD OF OIL AND GAS CONSERVATION. Is this normally the case? If not, how is the surface area included in our division order determined?
Don:
In general, a spacing unit in the Montana area for a horizontal well is 1280 acres. How many net mineral acres do you own?
This is a frac well with the drill site a little north of our area and the pipe extending almost straight south for almost 2 miles. We have mineral rights on 320 acres of the two sections involved. I think we will have 25% royalty interest. The spacing permit includes all of these two sections.
Don:
It sounds to me like your minerals are included in the spacing unit. From what you describe, the well is drilled off the spacing unit but the horizontal leg extends to the two sections to the South which is somewhat common, expecially if a pad has been built for another well say to the North. You have a very good royalty interest for the area.
Thank you for the confirmation.