IF I OWN THE LAND AND MINERAL RIGHTS WHERE THEY PUT THE PAD DO I GET ROYALTIES FROM EACH ADDITIONAL WELL DRILLED?
My actual royalties have varied between $55 - $80 per acre, per well, per month - Craig's estimate above is very accurate.
Thanks for sharing Carol mind telling of the set up. Are you into a unit, just a vertical what area in generic terms.
Bill - these are all horizontal Marcellus wells in my unit - 8 wells, 632 acres total in the unit.
Watch out, Carol. You are going to get a few marriage proposals from the guys on this site.
This is pretty disappointing news.... a lot of the estimates, even on this site are saying $10-$30/acre/day...... well above your $2-$3/acre/day actual royalty. Are your 2 current wells choked down or are they running full capacity @ 2.8 avg?
we have been seeing pads split into 2 units, a north and a south unit, this happens when someone still has a contract thats has a max unit size of 640 acres. so the " pad " can be spilt down the middle 640acrs to the north and 640acres to the south or anything less that will get them to the next unit. u will only collect on the land u have in a unit. in this case the well heads would be at one end of the unit and not the middle.
Try breaking that down a bit as to the effect upon a land owner. From what I could see is two individual units that would be treated as two separate units to deal with the acreage.
What would stop them from declaring that each individual lateral bore & it's drainage area is the"unit" . even if the pad & their leased land would support 6 laterals. they could run one lateral, pay royalties to only those it affects,while all the other landowner's in their 640 acres get zilch? They would have to wait for them to come back someday to drill again. ?
billy, thats is correct . 2 individual units. if u r in the south unit u get paid on the south well (s) if u r in the north unit u get paid only on the north well (s)
Bo, i dont see why they would want to do that, then they have to drill all 6 wells just to tie up the leases.
If the driller "declares" six Production Units at one well site then the driller must drill all six wells, one well per production unit, within 5 years to hold all of the land located in each of the six production units. On most modern leases, the driller cannot simply HOLD land by declaring a production unit and then never actually drilling the well.
The driller has 4 more years to physically drill on my land or they will need to re-lease my land (like most other modern leases). Regardless of whether the driller "declares" six production units or not.
so you're saying that the one to five acres m/l that the well pad sits on could be in four production units? doesn't sound right to me
Production Units are drawn around the drainage area of one or more Horizontal Well Bores. NOTE: There is no mention of a "well pad" in the above sentence. Sounds right to me.
A Production Unit may include all of the Well Pad or some portion of the Well Pad area. The Well Pad is nothing more than dirt, well heads and a fence. The owner of the land upon which the Well Pad sits gets financial compenstation per their lease. I have yet to read any lease term where it states that entire well pad was required to be included into that landowners Production Unit. Yes, anything could be negotiated into a lease but nobody has produced that clause, yet.
Please copy and paste the Clause from your lease that states the entire "Well Pad" area must be included into your Production Unit.