I was just notified by certified mail from an oil company's attorney that their well (sections 26 & 35) was drilled next to my mineral acres (sections 27 & 34) in North Dakota. It was drilled 479 feet from the west boundary and the current orders of the Commission require 500 feet. The oil company is now asking for the Commission for the well to be completed and produce oil and gas as it would protect correlative rights, prevent waste, and prevent the drilling of unnecessary wells. I agree with their opinion. However I feel it is unfair to us who have mineral acres in 27 & 34. It seems to me the fair thing to do would be to change spacing to 2560. According to the letter there are nearly 40 individual's and other oil companies that have mineral interests in 27 & 34.
Perhaps maybe someone has had to deal with a situation like this before that could provide a suggestion as to what if anything I could do?
Thanks for any and all suggestions.
Terry,
Be careful what you wish for. You may be in the heart of the Bakken in McKenzie County. If so, your sections may be subject to the drilling of multiple wells that you won't have to automatically share with the adjacent unit.
Most areas of the heart of the Bakken are now in full development mode. Last week I evaluated some acreage and came across 16 wells drilled to two formations. Most of the wells were drilled this year with some on standup 2560 acre spacing even though the wells are drilled in only two sections. Spacing for cost efficiency is going to get very complicated.
The operator may have spent over $250 million in 2014 in drilling and completing and definitely has plans for future development that will bring its completed well costs down.
If you are leased to an operator that is under financed, you need to be patient. Consolidation will take place as the development targets are exploited. The grass on the other side of the fence may not be greener.
Terry, l don't think a matter of 21 feet in the setback is a matter worth your time. As for 2560 development, you have not made clear that the operator has the greatest leasehold in both spacings, if they do not, the whole 2560 could change hands. I would let sleeping dogs lie on this one
Thanks for taking time to reply as I appreciate it.
I realize this isn't a serious error by the oil company and that once it gets to the hearings the 500 foot setback will be amended to 479 feet. I was just curious as to what happens if an oil company drilled, lets say, within 200 feet of the line.
In this particular case this I believe the operator has the greatest leasehold in both spacing. Of course I have no intention of pursing this.