Sandra, the two section lateral can be contested by a good attorney who should be able to use the ‘rule of fairness’ presented in the OCC’s own legal definition of “a spacing unit” which is “a legally described boundary designated by as a “common source of supply” of oil and gas for purposes of dividing fairly, among the various owners, production from a particular well or wells.” Also, a “common source of supply” is oil and gas contained within a reservoir that can not escape except by the drilling of a well that penetrates the reservoir. Therefore, strict interruption of the OCC’s determination of a “common source of supply” the two section lateral that holds a section without production by increased density has no legal intent of “fairness.”
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Yes, I would say that is possible. There are single vertical wells holding 640 acre sections. Since you are talking about Horizontals, it is also possible it could get challenged it they did not continue to explore through increased density.
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You cannot have a 1280 spacing in Oklahoma. 640 is the max. I believe spacing rules are more about conservation and to determine common source of supply. The area in a conventional formation can then be produced by one well. You don’t want 16 wells in a common supply that can be produced by a single well. If it is proven that additional wells are needed, then an increased density application is made.
Sure, any application can be contested. It is also not very common to see 640 acre sections with a single mineral owner.
We own minerals in several OK counties including Logan but we also have interests in Mora County NM. I thought it might be interesting for you all on this forum to be aware of what is happening in Mora. It is one of the poorest counties in the US and they have only three county commissioners there. Two of the three voted to ban any oil and gas exploration/drilling permanently. It is the first permanent ban ever. In the ordinance they do not have to compensate the mineral owners for their loss. The ban uses water as the issue of control. Our lease is with Shell Oil. Just recently three different parties have gone together to sue the commissioners. One of the parties is the Independent Petroleum Association of NM. The ordinance ban puts county authority over the state and the federal government and violates several amendments. It is interesting to watch and see how this will turn out. Not that OK would ever do this but if Mora wins it sets a precedent for others to follow. The push to ban came from a powerful environmental group in Penn. I will follow up with the link to the ordinance and the counter suit but I have to find were I stored them first. The attorneys from this environmental group are representing the commissioners for free. John Olivas, one of the commissioners said that he is well aware that Mora uses the resources of the oil industry for farming and daily living but he is not willing to have the oil industry in his county. He has made a permanent condition of poverty with this ban for the 5000 residents of Mora. We don’t know if there is even marketable oil/gas in the county but Colfax is just north of Mora and I believe that is very active production. Plus Shell has a huge financial investment in Mora and I don’t believe they would do that without proof of what is there.
It is interesting to add that there are other industries there such as mining that the commissioners seem to overlook.
I spoke with Shell and they said that if it gets impossible to deal with the county then they will drop the remainder of our ten year lease and move out of the county. They are not part of the lawsuit.
Operators are concentrating efforts in New Mexico’s portion of the Permian basin and environmentalists think the NM well count will go from 1900 to 19,000 like it did here in TX and earthquakes, pestilence , and fire and brimstone will rain upon NM like it does down here in TX. However, we Texans like it that way.
Ron, Here’s some good reads for the twins on Continuous Petroleum Accumulation. The 1st pdf is short and focuses on the Bakken and the 2nd data is long, but is all about OK. God has blessed American real good!
https://www.dmr.nd.gov/ndgs/newsletter/winter09/PDF/Bakken%20Petrol…
http://certmapper.cr.usgs.gov/data/noga95/prov58/text/prov58.pdf
If you ever listen to talk radio in NM, you will realize they are on a different planet. I wouldn’t buy a tootsie roll there, let alone a piece of property or mineral interest. They will take half of your tootsie roll and apparently all of your minerals.
My twin boys were born in Fote Wuth, Carswell Air force Base, Texas, and though they have moved around with us in the US Army all over the hemisphere, now in Pennsylvania, these 2 guys epitimize TEXAN. High school football both started every game of a 3 year undefeated streak and were awarded full 5 year football schollarships to the University of Richmond. They have been following this very website and have become well educated on wildcatters, the oil industry, Logan County (they want to visit bad, and will,) and our ancestor family tree goiing back through the Wrights,Shaffers, Carsons, Arbuthnots and we lose them after/before Mary Queen of the Scots. So Logan County and Minerals are very important to us and our family, and already has paid great dividends to each of us individually, and collectively as a bloodline unit, and that includes re-connection to my beautiful Oklahoma cousin I absolutel adored and sort of grew up with, and still love as much as I love anyone, and also her great husband, “This Is Not Cathy, but…” So Logan County has already blessed us immensly, even if I never see a dime in royalties. God bless America. Amen.
Exxon Mobil is calling for the US to lift restrictions on exporting domestic oil that date back to the Arab oil embargo in 1973. Once the export restrictions are lifted, (and they will be) operators will line the OK fields with wells as far as the eye can see.
Here’s the article. Good read’n.
http://www.foxbusiness.com/industries/2013/12/12/report-exxon-wants…
http://ropeco.org/custom/showalerts.php?id=4
This site has information regarding the depletion allowance tax reform.
Sandra, The OCC allows mineral owner(s) percentages based on the footage of perforations in each section instead of making it a 1280 spacing section. However, footage from a non-producing lateral can not be used to determine mineral owners percentages unless there is an increased density filed in a “reasonable” time period. Issues of “fairness” and “reasonable standard” are involved. The OCC applies rules of law that will benefit the general public, thus a “reasonable” application of the law is sought, compatible with planning, working, or getting along with others. However, operators who hold a section without production should be highly questioned as to" intent". I suggest contacting attorney Steve McNamara in Tulsa, OK (918 )599-0300
Has anyone heard if our legislature have removed the depletion write off on our taxes? I know their is a bill to do away with the write off, but not sure when it was coming up for a vote. This will really cost the mineral owners in additional taxes.
Martha, thanx. 1973, I guess that had to be Richard Nixon’s watch? I was in Ganeva when they announced the “end” of the Viet Nam War, as a matter of fact, my brother was with me there and then. It was big news, I recall also Las Vegas being totally in the dark and I was there then, too. Hoo boy. But for some reason, I seem to recall my favorite political figure, RONALD WILSON REAGAN, saying something like…“the reason deisel fuel is cheaper is because trucks use their fuel better…” I did not understand all I knew about that.
TIME Mags info link…
http://content.time.com/time/magazine/article/0,9171,891173,00.html
Not really revealing much, but this whole matter is just beginning?
Ron Von Wilson, Of all the US shale formations Ok shale has the highest Uranium content. Here’s the report http://pubs.usgs.gov/pp/0356c/report.pdf
Ron Von Wilson, Us wildcatters have know about the Uranium for a long time now. Played with the stuff to much and now I glow in the dark.
Interesting, KOCO in Oklahoma City is reporting that Coyle, Oklahoma, in Logan County, has too much Uranium in their tap water, and adding to this is TIME MAGAZINE reporting of a coming Uranium boom in Oklahoma? And some way, it came about, th information, that is, came about because of an Oklahoma Wildcatter? Here is a link to part of what TIME has about it, but I think you have to subscribe to get more information. Someone, Martha, I think, mentioned a possibility of Uranium and as high grade stuff hard to find? Anyone know anything?
Well. I am writing about a herd of Atlantis Dinasaurs ten times larger than the largest ones know theorized, who all went to Oklahoma to die when it was tropical? There were so many that they were collectively so heavy, and this guy Ally Oop saved one of them, but the rest sank several miles below sea level they were so heavy, and the elements then covered them over with what is now Oklahoma shale and stuff. Took billions of years, but that crude has not even been detected yet. Ludicrous? Ha. Our very world and structure is made of things just like this.
Thanks M Barnes. Appreciate the information.