There were actually 2 Emergency Orders signed 1-8-15. The first one was for 26-6S-1E establishing a 640 acres drilling unit. The second one was for Section 26 and Section 35 6S-1E was to approve a horizontal well in this 640 acre spacing unit for the Mississippian, Woodford, and Hunton source of suppy
Thanks for the info, Val…now I would like to ask a really dumb question, I guess. Is a 640 acre drilling unit a good thing in terms of potential production?? I assume that it is due to size? As I said…I’m a real newbie at all this.
Bummer!!!
Is there anyone who can tell me about 26-6S-1E? We were notified in December that the well was complete…but have heard nothing since except there are protests regarding this well. Is it possible to find out what these protests involve and how long it will take to resolve them? I can’t find anything on the oCC web site. And help would be greatly appreciated. Should we expect a division order soon?
Yes…Val…we received the notice, but honestly I don’t know what it means, really. Can you enlighten me?
I have MI in 24-6S-1E and haven’t heard a peep about leasing or anything else.
Thanks, Val, for the info. I really appreciate it. The leases my FIL had on section 26 and section 27 were signed in 2011 as well.
Ann, Are you referring to spacing’s larger than a 640? If not, I do not understand what you are referring to.
Spacing doesn’t matter. Let’s say it’s a 640 with a horizontal well. You have 64 acres in the section, so 10%. That’s how vertical wells royalties are figured and also many horizontal wells.
The production sharing agreement has a formula for determining your royalty share. It favors the mineral owners from the first “Take point until the Terminus” which means from the first place there’s a perforation to the end of the horizontal production pipe. The other mineral owners in the section do not get their proportionate share.
Too bad I miss out on this. I have mineral rights in 26-6S-2E.
Debby, I’m in 14, 15, 22 & 23 - no lease offers.
Margo, A horizontal well is a very good thing. It is my understanding they drill a well and if it warrants horizontal drilling they go for it and that is when they extend the unit. It will be some time before a division order comes out due to the horizontal drilling. Our minerals were leased in 2011.
I learned of something scary this week at a NARO sponsored meeting in Ft. Worth. Rather than base royalty % on acreage (like vertical wells have always been done i.e. proportionate share of the spacing)some leases for horizontal wells have a Production Sharing Agreement wording. It’s a formula that bases the royalty % on the location of the perforated intervals to the end of the production pipe to over simplify. So far it apparently hasn’t hit Oklahoma but watch for it.
That’s over simplifying, Troy. The formula uses a linear foot of frac penetration factor. Since I heard about this I’ve done some research. This article might explain better than I can:
http://www.oilandgaslawyerblog.com/2012/11/herein-of-production-sha…
Dear Ms. Whitchurch,
I understood what you said. Mr. Curtis admits freely that he did not.
I have an issue with PSA permits issued without Production Sharing Agreements in place. What do you find scary and why? I really am interested in your fear, because I am penning a letter to the RRC in opposition to the practice.
Best,
Buddy Cotten
My understanding is some royalty owners that are within the spacing may not get their proportionate share of production.
Mr. Curtis,
The reason that you have no idea what Ms. Whitchurch is talking about is that a Production Sharing Agreement and PSA permits are a Texas phenomenon, not Oklahoma. If the sum total of your experience is in Oklahoma, then there is no reason for you to have ever heard of a PSA, unless you just like to learn new things.
The PSA was a vehicle first used by Devon in east Texas to drill horizontal Bossier shale wells across existing Cotton Valley unit lines.
Since the drainage radius can be very small on shale formations, the PSA can be used to drill additional wells for the benefit of all.
On the downside, the RRC is issuing PSA-12 permits without a valid Production Sharing Agreement in place. This can be construed by some as step 1 for Texas forced pooling.
There are some very new cases on the matter – too complex to go into on an Oklahoma board.
Best,
Buddy Cotten
Buddy, my suggestion was for OK mineral owners to watch for this when reviewing a new lease.
I have read that.
I still think mineral owners should know what they’re getting if they sign a lease that has a formula rather than proportionate share based on acreage. That’s all.
I have just been told that there have been some PSAs approved by the OCC but I have not tried to verify that.
Does anyone have any info on 26-6S-1E and 27-6S-1E? My understanding is that there is a new well being drilled on the 27 section which might impact our mineral holdings…it’s called the Day-1…and I think a new well is being drilled on the 26 called the June well? I would appreciate any help with these. I have trouble accessing the OCC web site. Thanks.