My family has a small mineral interest in Section 18, Township 24N, Range 1E which has a producing gas well on it.
Range Resources is attempting to establish a 640 acre drilling and spacing unit in this section. I just received an offer to purchase our minerals from United Prospects. I have a question that I hope I can get help on.
I can’t find a lease between my family and the operator of the current gas well; but if there is one, can the minerals be leased again if they get the 640 acre unit established?
The producing well is the Maxine 1-18 operated by Linn Energy. It is a vertical well but I don’t know the depth or formation. I believe we have a 1/3 of the NE4 of 18. According to the application for the 640 acre unit, it is to include the Cottage Grove, Oswego, Skinner, Red Fork Mississippian and Woodford from the depth of 3,445’ to 4,995’.
The Maxine is not a very good well. It looks as if your lease is held by production, if so you would have the same interest in any of the wells they might drill on the 640. You should do some research before you sale. Here is link to Maxine. http://imaging.occeweb.com/OG/Well%20Records/00000001/OCC_OG_31H38BC_3TIV3MM.pdf
That would depend on if you have a Pugh Clauses. If you don’t, you won’t be able to lease it again as it’s being held by production. You can go to the County Clerk office and look up your legals and find the lease and get a copy. I would guess that Range Resources are asking for space on other sand/shade than what your present well is producing in. If you don’t know what sand your certain well is producing in, you can call OCC and ask Junior if you know the well name, he can look it up for you.
That’s a link to a drilling permit posted by OCC today for Territory Resources to drill a horizontal well under Section 14, Township 24N, Range 1E in the Mississippi Lime formation.
I’d suspect there are similar plans for your section as well.
That’s a link to a drilling permit posted by OCC today for Territory Resources to drill a horizontal well under Section 14, Township 24N, Range 1E in the Mississippi Lime formation.
I’d suspect there are similar plans for your section as well.
Thanks for the links. I’ve been watching them but it seems to take a while for the information to be updated after wells have been spudded. I’m not familiar with the horizontal drilling spacing and royalty laws in Oklahoma.
How many wells can be spudded in 640 acres if the production is in another section? If you have royalties in the surface hole section but the production is in another section, do you participate in the revenue?
On the other hand, if the production is in the section (unit) that you have royalties in, how many wells can be drilled into 640 acre unit? If the wells are spudded outside of the unit but produced from your unit, are you entitled to royalties?
I’ve noticed the well above is the 1-14S but it was spudded in Section 23 and the production looks like it will come from Section 14.
I have a similar situation in Kay County (not much discussion on that board) where they are spudding in our section (unit) but the production is coming from another section.
Larry said:
Looks like they’ve already started drilling this well - here’s the spud report posted today, only a week after the permit - jealous ;’ /
That’s a link to a drilling permit posted by OCC today for Territory Resources to drill a horizontal well under Section 14, Township 24N, Range 1E in the Mississippi Lime formation.
I’d suspect there are similar plans for your section as well.
All good questions I’m anxious to learn the answers to myself. I’ve just begun trying to better understand drilling from an adjacent section. I think/guess its goal is to better harvest more oil/gas by accessing the productive formation closer to the section boundaries. But that’s as far as I’ve gotten so far.
Hope somebody who does better understand it all answers.
mike hickman said:
Thanks for the links. I’ve been watching them but it seems to take a while for the information to be updated after wells have been spudded. I’m not familiar with the horizontal drilling spacing and royalty laws in Oklahoma.
How many wells can be spudded in 640 acres if the production is in another section? If you have royalties in the surface hole section but the production is in another section, do you participate in the revenue?
On the other hand, if the production is in the section (unit) that you have royalties in, how many wells can be drilled into 640 acre unit? If the wells are spudded outside of the unit but produced from your unit, are you entitled to royalties?
I’ve noticed the well above is the 1-14S but it was spudded in sec23 and the production looks like it will come from Sec 14.
I have a similar situation in Kay County (not much discussion on that board) where they are spudding in our section (unit) but the production is coming from another section.
Larry said:
Looks like they’ve already started drilling this well - here’s the spud report posted today, only a week after the permit - jealous ;’ /
Called; phenom #1-14H
Larry said:
That’s a link to a drilling permit posted by OCC today for Territory Resources to drill a horizontal well under S14 24N 1E in the Mississippi Lime formation.
I’d suspect there are similar plans for your section as well.
They can only drill as many wells as OCC gives them permits for. But, if the production is really good, they may drill several in the same area or even the same pad. They usually drill from North to South (but not always), 2nd hole maybe North to East and the 3rd can be between them. This is usually a general thing, but not always as it will depend on how the sands run. What most of us don’t understand, it takes oil people a lot of work to get things and information together before they go for a spacing at OCC, then it may take a few more weeks or months before everything else can be started. So, just because someone got a spacing doesn’t mean your well will be drilled in the next few weeks. There is lots of work that goes into each well before it can be drilled, then it’s another thing to get it hooked up to everything before it can be produced. So, thank all the oil people for doing a great job. And lots of these oil people are really nice guys, just a few bad ones in the barrel that makes it hard for everyone.
I live in Arlington, Texas and we have as many as 4 to 6 wells per pad. These H drilling rigs can move without being torn down and moved. I think they are drilling a well on Red Rock Rd and Highway 77 north of Perry where they are moving the rig on one pad and drilling more than one well.
Usually you will only get royalty from the 640 acres (one square mile) that your minerals are under, but if they have spaced it across the road, they can drill an extended H-well up to 2 miles, so that means you could be spaced in a bigger pool of acres, making your checks a little smaller. They can’t pull oil from under someone property that isn’t spaced, at least they aren’t supposed to. That is why it usually has so many feet from the line like 640 ft from the east fence and maybe it will say 320 ft from the North line. This is to protect the owners across the road.
Good luck,
Hope you get a big well and that your company knows how to write checks.
Remember everyone, find out when the first oil is sold, they have 6 months from that date to get a check to you or they will need to pay interest.
Ya’ll have interesting things happening around there. There’s another spud report today a few miles east in Section 11. Here’s a link to the drilling permit which gives more info. I find its name including MH instead of just H interesting. I’m wondering if it’s as simple as MultiHorizontal since the permit is for two depths. Also that it’s permitted to use oil based mud, which in my drilling vertical holes days was for deep holes due to the heat.
I am involved in a multi-unit well where the rig is on Section 1 of a Township drilling under Section 36 & 25 of another Township. Section 1 has no interest in the well just 36 & 25. I don’t know how many wells they can or would put on a section but I have heard of 8 horizontal wells on a section.
I appreciate the information. There is a lot to learn about horizontal drilling and Oklahoma laws. I live in Texas too and have some experience in conventional wells but this is all new to me.
Virginia Pflum said:
Mike,
They can only drill as many wells as OCC gives them permits for. But, if the production is really good, they may drill several in the same area or even the same pad. They usually drill from North to South (but not always), 2nd hole maybe North to East and the 3rd can be between them. This is usually a general thing, but not always as it will depend on how the sands run. What most of us don’t understand, it takes oil people a lot of work to get things and information together before they go for a spacing at OCC, then it may take a few more weeks or months before everything else can be started. So, just because someone got a spacing doesn’t mean your well will be drilled in the next few weeks. There is lots of work that goes into each well before it can be drilled, then it’s another thing to get it hooked up to everything before it can be produced. So, thank all the oil people for doing a great job. And lots of these oil people are really nice guys, just a few bad ones in the barrel that makes it hard for everyone.
I live in Arlington, Texas and we have as many as 4 to 6 wells per pad. These horizontal drilling rigs can move without being torn down and moved. I think they are drilling a well on Red Rock Road and Highway 77 north of Perry where they are moving the rig on one pad and drilling more than one well.
Usually you will only get royalty from the 640 acres (one square mile) that your minerals are under, but if they have spaced it across the road, they can drill an extended horizontal well up to 2 miles, so that means you could be spaced in a bigger pool of acres, making your checks a little smaller. They can’t pull oil from under someone property that isn’t spaced, at least they aren’t supposed to. That is why it usually has so many feet from the line like 640 feet from the east fence and maybe it will say 320 feet from the North line. This is to protect the owners across the road.
Good luck,
Hope you get a big well and that your company knows how to write checks.
Remember everyone, find out when the first oil is sold, they have 6 months from that date to get a check to you or they will need to pay interest.
I live in Texas, but most of my property is in Oklahoma, so I have to keep up with both states. I own most of the surfaces where my minerals are except for a few 1,000 acres of minerals in other places. If you will google Oklahoma Laws, you will see a few things different than Texas. Texas is a Community property state and Oklahoma is Tenants in Common. But, Oklahoma has a Homestead rule, so both husband and wife have to sign a lease as if they were Joint Tenants, unless you state it’s not a homestead on your lease. This probably doesn’t bother most people unless you need to keep separate property for estate tax, then it can get to be a problem.
Also, since your minerals are in Oklahoma and you live out of state, Oklahoma takes 28% off the top of any oil checks for Oklahoma state income tax. They also figure their state income tax a strange way. Let’s say, you make $10 net in Oklahoma, but you are in the 33% tax bracket, then you will be in the top tax bracket in Oklahoma. I think that is about 7%, but my CPA takes care of that so I’m not sure. I know it can be a lot if you have lots of income from the state of Oklahoma.
Horizontal well is a whole lot different than vertical well drilling. They even frack different. Some companies are using gas fracking other still use water. Sure glad you live in Texas and you own some of the Texas panhandle that we call Oklahoma. That is a joke. Oklahoma is a great state, just wish they didn’t tax everything they can find.