I have a percentage of a lease in Martin County, Texas that has no active wells and Black Swan is the operating partner.
I’m not well versed in the legal aspects of the oil industry, this is an inherited lease. Black Swan has, under Rule 37 0337393 (Texas Railroad Commission), applied for a “spacing exception permit” which will only be denied if there is a formal appeal filed.
I would like to know A) What is a spacing exception and B) if I do not file an appeal will I be waiving any rights to revenue generated, ongoing retention of that portion of the lease, etc.?
There is some chance that I don’t know what I am talking about, it’s been a while for me and Texas regulatory fun.
Rule 37 is, I believe, set up so nobody drills a well too close to another well or to somebody else’s lease. Chances are they are asking to drill this well closer than 467’ from the lease line. Or they are possibly asking for a rule 37 exception because this well is too close to another well that they plan to drill in the same lease.
Sounds like you are leased to Black Swan and are in these wells. Assuming your lease is being dedicated to these wells, you shouldn’t care. You want them to drill close to the lease line. You don’t care if wells are too close together. More oil for you.
IF, however, you are being contacted because your acreage is adjacent to the acreage they are drilling (i.e. you have no ownership in these wells), and they are drilling this well right on your lease line, then yeah that’s why they have these rules. So you can protest them draining your lease and not paying you. That’s not necessarily easy to do. If that is the case, then contact whoever leased your minerals and ask them if they are going to protest or otherwise protect your correlative rights.
