Meaning and affect of "unitize"

Oklahoma Mineral Rights Pawnee County, OK
1

I just joined this forum, and am not sure of the procedure used to ask a question. I thought I had successfully asked my questions; but, it appears I may not have used the proper procedure and that the questions I submitted may have been lost. So, here goes again in hopes I am successful in submitting my questions this time. Forgive my redundancy, if my first attempt did not fail.

I own part interest in the Vanhoy lease near Hallett. I have been made aware that the OCC has before it, a proposal to "unitize" this lease and the surrounding leases. I am seeking to learn:

1. The meaning and concept of "Unitize";

2. What affect this action, if approved, will have on the amount of money I realize from the production of this/these wells; and

3. Under what authority the OCC can decide to approve any action of this type that might have a negative affect on the amount of money an individual receives from his or her interests in a well(s)?

Thank you for your time and indulgence in responding to these questions. David Bedingfield (410 790-5165) [email protected]

2

David,

Unitization allows the oil company to aggregate the minerals needed to be able to drill the well they have planned. If it's a horizontal well, they need more minerals under lease, usually 320 to 640 acres per well. Vertical spacing units are much smaller in Pawnee Co. After the oil company has taken as many leases is it needs in order to feel comfortable in proposing a well, they unitize the spacing unit. In Oklahoma you only need to control one acre of minerals to be able to propose the drilling of a well. Unitization will provide any of the unleased mineral owners in the section the choice of usually the three best offers made in the area and they can chose whichever option is best for them. This allows the company to drill a well in areas that they do not have 100% ownership of the leases needed to produce the well while providing the option of the areas best deals...That can be considered both good and bad, depending on which side of the fence you butter your toast ;0)