ROYALTIES

IF I OWN THE LAND AND MINERAL RIGHTS WHERE THEY PUT THE PAD DO I GET ROYALTIES FROM EACH ADDITIONAL WELL DRILLED?

 

 

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Permalink Reply by Carol on February 7, 2012 at 11:17am

My actual royalties have varied between $55 - $80 per acre, per well, per month - Craig's estimate above is very accurate. 

Permalink Reply by Billy Park Whyde on February 7, 2012 at 11:24am

Thanks for sharing Carol mind telling of the set up. Are you into a unit, just a vertical what area in generic terms. 

Permalink Reply by Carol on February 7, 2012 at 2:19pm

Bill - these are all horizontal Marcellus wells in my unit  - 8 wells, 632 acres total in the unit.

 

Permalink Reply by Marinell on February 7, 2012 at 5:25pm

Watch out, Carol.  You are going to get a few marriage proposals from the guys on this site.

Permalink Reply by mike4t on February 8, 2012 at 10:41am

Carol,

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?

Permalink Reply by rat hole willy on February 6, 2012 at 11:12pm

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.  

Permalink Reply by Billy Park Whyde on February 7, 2012 at 12:02am

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.  

Permalink Reply by bo boboski on February 7, 2012 at 5:25am

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. ?

Permalink Reply by rat hole willy on February 7, 2012 at 6:10am

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.

Permalink Reply by Utica Shale on February 7, 2012 at 9:08am

Bo,

 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. 

 

Permalink Reply by mike4t on February 7, 2012 at 11:21am

@UTICA SHALE

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

Permalink Reply by Utica Shale on February 7, 2012 at 11:54am

Michael,

 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.

 

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