XTO is operating (or permitted) several new wells in Midland County, Section 14, 40 T3S, A-816 under the Kyle 2600 Unit 1 and 2 lease. I believe there are 16 horizontal wells with a terminus in Section 26, 40 T3S, A-768. XTO royalties are still a bit of a black box to me and I’m wondering what things I should watch for and what things I should ask XTO, if anything. I have ownership in A-816 but not A-768. Are royalties paid as a percentage of surface ownership along the bore or entirely on the surface location, in this case A-816? XTO pays on tracts so it is hard for me to figure out what is pooled and what an individual well is contributing beyond studying the RRC site and what’s populated in MineralIQ.
According to RRC those Kyle 2600 wells were permitted in pooled units. For Unit 1 the pooled acreage included Sections 19 and 24, and for Unit 2 Sec. 19 and 26. The plats XTO filed with the permits show the drill site locations for those wells in Section 14 but the first take point for each well across the survey line to the south in Sec. 19, and Section 14 was not included in the unit.
Below is the plat for one of those wells showing the unit boundaries and the proposed route of the horizontal leg of the wells in Unit 1. The plats of the wells in Unit 2 look the same. RRC approved those permits in May of last year but the records don’t indicate they have been drilled.
With the amount of horizontal activity on each side of Section 14, which looks like the hole in the donut, and the old vertical wells reaching the end of their life, it seems like something could be happening there soon. The question may be whether an operator can put together the contiguous acreage it would take for the kind of two section, long lateral, wells everybody is shooting for these days.
