You get paid on all wells in the total unit (except for the excluded ones). You may need to call the DO analyst on the order to get the right math. Have your net acres ready and which tract they lie in. It usually has to do with what percent you have of each tract(s) and then what percent that tract has to do with the whole unit. If you are in multiple tracts, then get the formula for each piece. It can get quite tricky. Make sure it matches your deed. I am “working with” NFX right now on one where they assigned the wrong tract to me and didn’t assign my larger one to me correctly. Also find out if they are releasing the zones above and below (so you can lease again). This is critical if the Springer/Goddard is involved. Keep paper copies of all correspondence (I write instead of call). Send everything certified.
We have some units that have been around since 1919, so get the paperwork right the first time as it can affect generations of heirs. I love getting royalties for wells that are not on my acreage due to unitization! (although it can go the other way as well, I share to other folks.)
I guess my next question is whether or not to sign the Ratification of Plan of Unitization Form… If i dont sign, what will happen??
I think the question here is how does unitization affect the royalty owner? Do you only get paid for the wells producing from your tract? I have read the statute on horizontal shale well unitization and all it does is confuse me more.
If I use the formula Michael posted below I get a larger % than I currently have in a 640 ac unit. I’m missing something.
Michael - Forgetting my posting or any other forum posting, my low key suggestion is to just go ahead and call the NFX Landman as listed on your Order as they are usually very accomodating in clearing up any confusion and the buck obviously stops there. If what I have suggested is incorrect, then I would appreciate your additional feedback either way.
sorry. Just got it in the mail…
So it looks to me as though it benefits the company more than the royalty owner with one minor caveat… that is that your tract would have to be in such a position to “soak” up more production than your neighbors next to you…
It was a little late when I wrote that.
My point was not so much about Sections 1 and 12, it was that NFX seems a little premature in trying to unitize a 2 section segment of the larger Woodford field.
In historic unitization the field is large, well defined and mature. Secondary recovery methods become necessary. Water flooding for example will force oil to one side of the field. The wells there will be able to recover this oil. The water flood wells will be drilled, in some cases, many miles from the recovery wells. Unitization allows everyone to share in the newly recoverable oil.
I am not really sure what NFX motivation is but, I know whatever it is, its strictly in NFX’s best interest.
In the instant case, if all of the wells are 10,000 ft. laterals, there will not be much of a difference in the allocation between 1 and 12. The problems begin when the wells come up short. We have both sides of this in Section 36 and 35 02N04W as wells ran into a fault stopping half way across.
Bob is correct. This is why NARO took a stand against 1280 acre units.
This article explains it better than I can. Read all the way through it, because there are 2 parts. 1 explains the differences between a 1280 unit and a multi-unit consisting of Two 640 acre units. But part 2 covers what they are applying for here. The question is what are the real plans and what do they want to gain in this case. And what does the Mineral owner stand to lose.
http://iogcc.publishpath.com/Websites/iogcc/images/2011BuffaloPrese…
I think I will need to work up a table of various ownerships in which section before I can make up my mind on if I am for or against. Will get back to you on that one…
Great power point. Good displays, that is why I was struggling with my answer and how to convey it. So many different scenarios and 1280 is not always a good answer given the geology.
Howard, 14-1N-5W
Continental Resources is pretty active in the area. They filed permits in 15 and 22 in late 2014. They had cases before the OCC, but pulled back a little. Some are pending and some were dismissed.
XTO and Continental and a few other small ones have filed 50 leases in 14 over the last 24 months, so be sure and get a good lease or wait for pooling.
To me, it is actually good if they only cover the lower zones. Then you get a chance at new leases or pooling in the upper zones. I have had several tracts that got second chances this past year since the Springer had not earlier been pooled. Another bonus makes me happy. I actually had one tract that had four different pooling/leasing bonus payments over the years.
I only had a chance to briefly look at a similar NFX application. My initial opinion is that they are using the unitization process to get 1280acre spaced unit. It is my understanding that this was what the operators were trying to do 6-7 years ago. NARO and other organizations battled it and the Shell Reservoir Development Act (2011??) was more of a compromise. This gave them the power to tie two 640 acre units to the same “multi-unit horizontal well”. As you know, that is entirely different as it is based on perforated lateral lengths within the units. It makes me wonder what the end result they are after by unitizing the two sections. I wish I would have had this info this time last week! 
Mike McR - I’m confused as to what your last posting is in regard to as at least in the case of Sections 1 & 12, they had already previously been subject to Poolings so the Unitization in this case has nothing to do with a “choice” in Unitization versus Pooling so why would NFX have to prove any equitability versus a Pooling as these are two (2) different processes used in these cases for different effects.
Without obviously knowing the NFX actual intent and logic, there is one “possible” advantage and disadvantage to a presumed 10,000 Ft. Lateral within a Unitization.
And that is for example I am in Section 1 where the surface location is going to be in Section 13, and “if” a Lateral were to come up shorter than 10,000 Ft. Section 1 would have an apparent “advantage” along with Section 12 having a possible “disadvantage” in that the two (2) Sections would be sharing “equally” in all of the resulting Production.
This same theory would also take place in Michael Warden’s situation involving Sections 13 and 24, where depending on where the surface location is (assuming Section 25) then in my opinion Section 13 could receive more net benefit “if” a Lateral were to come up short.
And as an additional add on to Martha’s comment the Section 1 & Section 12 Unitization only requires 63% of the Mineral Right Owners to approve the Unitization, and I would assume that Sections 13 & 24 have a similar low 60’s approval requirement.
Personally I just want them to drill the five (5) new 10,000 Ft. Lateral wells with hopefully similar great Production as those in surrounding 02N/04W Sections, and it is hard for me to believe that these proposed Unitizations will not go through and without any major problems!
I had not yet opened Rick’s Attachment when I posted my last comment, but the 63% Approval Percentage appears as if to be the uniform number required!
I appreciate you guys and your knowledge you have brought to the table. We all like to see “action” in the diggings. However, it is very irresponsible for me, as a mineral owner, to just sign the document in order to allow the drilling to proceed without first weighing the pros and cons. I cannot see NFX doing this unless they are to benefit in some way. Its just the way it is. What I can see is a precedence being set for future section unitization. So we need to wrap our minds around this and do what is best for us as mineral owners.
I have no clue, at this point, what avenue is best. But i can assure you, I will educate myself on this in the coming days.
Martha, please accept my friend request. I have some info to email to you regarding a particular unitization plan. I would like to see what you gather from it. I think youre on to something regarding depths and formations included in the units.