Hi,I am getting conflicting information,so I am hoping someone knows the answer to this.There is a multi well gas pad close to our property.I called the company and was told that we are in the allocation area,but upon looking up the well directions of those wells already drilled,it appears they tend to veer away from my property.I am not an expert map reader,but is the fact that we are with in a mile of these wells make up for the fact that they may not go directly under our property?Or does the drilling have to go under your property to collect royalties?The lease is written in Sanskrit-it was no help to me at all...Thank you in advance.My apologies if this topic has already been addressed.
You are in the royalty zone if you are in a lateral unit, usually speed 5-600feet from the laterals. Or you may be in a more expansive working unit, and that may make a difference in how royalties are paid. If on the lateral unit it's based on acres within the lateral pull, (500-600'). If based on a working unit the royalty could be spread out and divided by the total number of areas in the entire unit.
Inchworm antenna,thank you for your response,and for telling it a way that makes sense.These gas companies aren't very generous with the specifics..
The pooling provision in your oil and gas lease will provide specifics on your question. Typically, a pooled unit is formed around multiple wellbores (some side by side, some north/south) and everyone in the unit will receive a royalty from each well in the unit, regardless of the specific location of the wellbore. As stated by "Inchworm Antenna" your portion of royalties is determined by the amount of acres you contribute to the unit, divided by the total unit size, and then multiplied by the royalty percentage in your oil and gas lease.
Thank you,Landman Dad for your answer!People on here make so much more sense that the companies themselves when explaining a novice's question!
Sanskrit is my favorite dead language.
Allocation is just more Sanskrit jargon.
Let's answer the simple question first - no, a well does not have to go under your property.
For you to receive royalties, your property must be included in a well unit.
A well unit varies in size for many reasons.
You need a plat for the well(s) already drilled.
Where is the location? Well Name? API # ?
Any info you can provide.
lol...I'm sure you are right about "allocation" being more Jargon.Sanskrit simplified.Thank you for that.I have the well name and location and I can easily get the API#,etc.Is the well unit on record somewhere other than the gas company?I was told that a map of the properties involved will be sent out with papers that need to be signed and returned to the company shortly before the royalty checks are sent...If I could see a copy of that map before it is sent out,my day would be made.Thank you for the info.
The proof will be when you receive a "Production Unit" notice. It will detail the shape and size of the unit and must be given to everyone with acreage included in the unit. This unit may differ in size/shape from the original declared unit.
The second little gem will be the "Division Order", and this will further clarify unit size, the number of your acres included in the unit and your royalty percentage. It will then calculate a 'decimal interest', and it will be VERY important for you that it is accurate and correct. Do not sign one until you have verified the math!
bullfrex is the production unit notice a requirement because I'm in the flowback phase and haven't received a thing ?
I was told by a company rep that the wells were going on line in Feb.,and we should receive notification in April...I am really curious to see the map and papers.I hope she was correct.I spoke to her in Jan.Oh,I should have mentioned that the wells in question are in Pa.I am not sure that makes a difference with all the great replies I have received.Also,I have checked the reports on the marcellusshale.com site and it states "no newly producing wells".Does this mean they are behind on reporting or is the well development behind schedule?Thanks once gain.
William, I can't recall the exact timing, but it seems that Production Unit should be/or is very nearly ready to record and distribute.
Crazy CW, my replies would relate to PA wells, I am afraid I am ignorant of any other States' procedures.
Thank you,Bullfrex...Pa wells are what I am interested in.
this is in wild and wonderful wv lol