How does OCC determine spacing for drilling permits?
Standard spacing is a 640 acre unit. Usually a Section.
Sometimes spacings can be smaller or larger depending on the geology.
Someone with more expertise should answer though.
I was wondering because there are three wells very close to our old property and we have never heard anything about being compensated. Was told it was because they were each spaced at 80 acres but not sure on the unit. We have leased several times over the years but none have drilled. I just received another lease offer and am thinking it over. Another question I have is, if there's nothing there, why do they keep coming back?
I think it is determined by industry practice. In the 40's and 50's they were drilling vertical wells and had spacing of 20, 40 and 80 acres. Fracking vertical wells probably required a little more spacing maybe 160 acres. Now with the horizontals traversing the entire width of a section they are asking and receiving 640 acre spacing. They might have to get an exception to the spacing order when they drill additional horizontals in the same section.
Basically, the companies have convinced the OCC that 640 acres is the way to go for the horizontals and there are even a few that are 1280. I hope that does not catch on.
Be glad and thankful they keep coming back. That is the reson it is sometimes better to take more bonus and less royalty when leasing rather than les bonus and more royalty.
The reason they keep coming back is the geology says that there is gas/oil down there, they just haven't drilled in the right spot for it yet.
Thanks for the replies...we're thankful and yes will probably take the bonus because of the history.
What are the cons of warranting the title in the lease agreement?
Most lease agreement I see want you to warrant the title by paying THEIR attorney fees. I’m not willing to write them a blank check for what THEY want to spent on THEIR attorney on something they already we supposed to run title on. I ask the warranty line to be removed or limited to the bonus amount paid.
Ahhh...I see, have they ever refused Rick?
Kenneth, It just seems like something they try to get away with. I did the same as Rick and it was no problem.
The standard spacing in Oklahoma is 1320 ft. from all section lines in a 640 acre unit which puts it roughly in the middle of the section. This is not practical for long horizontals so they come back and ask for a Location Exception. I have noticied that some companies are saving that step and applying for horizontal spacing to begin with.
I have had them dance around some of the other changes, but not that one. Not yet anyhow.
Kenneth said:
Ahhh...I see, have they ever refused Rick?
Well, Mr. Bearcat says Continental will not remove the title warrant clause but it is limited to the bonus amount paid so I'll probably go ahead with it. Will be a nice little bonus here just before the holidays.
Kenneth,
My lease was with Continental too, Landman with Jackfork Land said o.k. didn't even check with Continental. Jackfork does a lot of leasing for Continental, you might get a better deal from them. If I had your legal description I could find out who is filing leases in the section, is it in 2N/4W ?
It's 9, 1N, 6W
Kenneth,
No leases have been recorded in that section, so unless you own the whole thing no one has signed on yet. The OCC has no cases pending. If Continental or someone else is planning on drilling the process of getting Judicial Orders, permits etc is many months into the future. You can take the bonus now and have a sure thing or wait until something gets started and probably get a much larger bonus. Are you Kenneth Randall?
Yes, Kenneth Randall...I'll be thinking it over...thanks for all the input.