365 acres owned since 1920's now handed down to 3 family members. Half in one section and half 2 sections away. Mineral rights still owned by landowners. A well is pumping and producing oil. The well is actually on another's property but being drilled under this lease. The lease was to expire last year but was extended due to the well now active and producing. Questions: are all the people on the lease considered in royalties even though the properties are on 2 different sections maybe more the 1260 acres apart? How can a well be drilled on another persons property and under someone elses lease? 80 acres 80 acres and 165 acres.
Ms. Kracht, I think it is better to have a separate lease for each spacing, it acts as a natural pugh clause. If all of your acres are on one lease, the acres that are not in an actively producing spacing could be held by production without paying you royalty if you do not have a pugh clause. You will be paid royalty for any acres you have in the producing spacing. By law, all the acres in the spacing receive the same royalty as if the well was drilled directly atop or had the wellbore pass through them, supposedly to protect corelative rights but also allows the lessees to hold much more unproducing mineral acres, by paying them royalty from the well that is not draining them, diluting the royalty of those who are actually being drained. I am on both sides of that equation, held by wells that are not producing my oil, yet supposed to be receiving royalty and with wells draining my oil and part of my royalty paying to hold someone elses acres that are not being drained. I hope you have a pugh clause. You can learn which spacing your minerals are in from the GIS server map found on the NDIC O&G Division site. Find the map, select find section from the left bottom, input your legal description, select drilling spacing from the right side, click on zoom to spacing to apply. The spacing will have a faint white outline. I hope this helps and I hope you have a pugh clause.
Thanks for the help. Will check that out. Have been on DNIC O&G but I am just starting to learn. The well just came off the confidential list a couple of weeks ago. I learn something new everyday..
Jennifer,
If the parcels were handed down as "undivided" shares, all will share in royalties from a lease no mater what part of the land it producing. However, if the three individuals were given separate parcels, only the owner of a parcel in a producing unit will share in the production from that land. Hope that helps.
If the well is not still awaiting fracking I might be able to get you some production numbers if you will give the legal description. I was already looking up some values for some other forum members and it just takes a moment in any case with the basic subscription to the NDIC O&G site.
jennifer kracht said:
Thanks for the help. Will check that out. Have been on DNIC O&G but I am just starting to learn. The well just came off the confidential list a couple of weeks ago. I learn something new everyday..
The well just off confidential list 2 weeks ago. It says A OG bopd 3278 and pwpd 2854. I believe there is a pugh clause because the last conversation was questions on the unitization of the property??? I would love to discuss more about the well and if I get permission to talk to others about it I would love to do that. The person is my dad and he is 90. He loves me to get info for him but I don't want to do anything without his permission. He is writing a letter to his lessor on the property. He has talked about this property since I was a little girl. I am an older girl now. He has leased the property out for over 50 years. Would love to see him get results before he is no longer here to do that. Thanks so much and hopefully will be able to share more soon.
r w kennedy said:
If the well is not still awaiting fracking I might be able to get you some production numbers if you will give the legal description. I was already looking up some values for some other forum members and it just takes a moment in any case with the basic subscription to the NDIC O&G site.
jennifer kracht said:Thanks for the help. Will check that out. Have been on DNIC O&G but I am just starting to learn. The well just came off the confidential list a couple of weeks ago. I learn something new everyday..
Ms. Kracht, many spacings in McKenzie county are being changed from 1280 to 2560's by joining them to another 1280, this might be the unitization. There are pros and cons to this being done. I have more than a handful of wells in McKenzie myself and am always happy to discuss things with others who do.
To add to this discussion, I have wells in 2 adjacent 1280's that have been combined into a 2560 a long time ago and there has been no further drilling since. I wonder what the point was. The operator is Burlington Resources which is Conoco althouh Burlington denies it, but if that is the case, why does Conoco contact me about the division orders? I guess Burlington can't handle that sort of thing and Conoco just lends a hand.