I have been contacted by a exploration company for a parcel of land that I have a fractionated interest in. There are currently no well on the three parcels but there are over 100 wells adjacent to the land that have been producing for over 25 years. The lease package makes no mention of royalties associated with adjacent drainage, only on site production.
Not signing until I have more answers.
Thoughts?
RedFox,
The units drilled around you are filed as a declaration of unitization (DPU) in the courthouse. Each unit of 640 acres more or less is how the operator designs the units and the area you are in has not been developed yet. They will file a DPU later when they have a majority leased up. The operator lays out these units where the well pad site is located. It doesn’t mean they are taking gas from under you. The well leg laterals are usually drilled in a north and south unit. Northwest and Southeast. Here is the link to the WV DEP oil and gas mapping. https://tagis.dep.wv.gov/oog/
Hi! Please read through the terms of the lease carefully and of course ask here or with an O&G attorney for more specific information, but I believe that becoming familiar with horizontal wells would be a great place for you to start!
Firstly, you have been identified as a mineral owner. Now is a good time to find out how many acres that amounts to. As the other commenter mentioned, you are part of a pooling unit. This means that a horizontal well will be drilled through all or SOME of your land. Leases in WV can vary quite a bit but the terms are negotiable. Try to seek a higher royalty rate and also no deductions. Often the operator pushes the cost of operating onto the mineral owner. Another thing to keep an eye out for is a right of first refusal. These all will play a future role in how valuable your land is.