Split Pad Units -North/South Units Off One Gas Pad

A friend from work told me that he is in a split pad unit. He is in the north side unit and will not share in the royalties from the south side unit even though there is only one gas pad. Is this good or bad for landowners? What about the landowners who have the pad on their properties?

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Permalink Reply by patty on January 31, 2012 at 1:54pm

I was wondering how this n. and s. unit all on one pad works also bc we are in the same situation.  We are in the n.  unit and there is also a s.  unit on the pad.  Have you learned anymore info as to how this works?  I see there are five wells on our pad, so now I am really curious as to how this works out for the land owners in the unit.

Permalink Reply by bo boboski on January 31, 2012 at 2:37pm

Vert good Question!  I,like everyone else have assumed that all landowners within the "unit" area would be getting a share of the gas/oil coming out of the wellhead. but if there are 6 wellheads on a single pad,I guess only the landowners within the boundaries of each  lateral run would be entitled to royalties from that  wellhead. Even though the unit may contain all 6 laterals and 1280 acres. Why should you get royalties from O/G coming from your neighbors property on the north or south side of the pad?  Like to hear more opinions and/or facts on this subject.

Permalink Reply by Jim Litwinowicz on January 31, 2012 at 3:35pm

I was always told that all lessees within a unit will share all the proceeds from any well within that unit. So the proceeds of a well that goes to the south west will be shared with people that are north east of the wells. It is very common to get royalties from a well that is not even close to your property as long as it is in the same unit.

Never heard of a split pad unit but I guess it is doable. If they declare two separate units you would only get royalties from a well on the same side of the pad.  If your property is not a large parcel, you may still get royalties from a well that isn't on your property as it may pass through adjoining parcels but not yours. You may wait longer to get royalties as wells drilled the opposite direction will not benefit you.

Not sure the advantage.  Perhaps they are drilling much longer laterals and can access all 1280 acres from just one side of the pad. Or planning on extending the laterals later on after the original laterals deplete.  This would allow them to HBP 2560 acres with just two laterals. I bet that's the strategy!

What company(s) is doing this?

Permalink Reply by Jeff on January 31, 2012 at 4:24pm

Chesapeake seems to be one of the leading ones.   They have now even divided a pad in a Sullivan County unit in 4.   Southeast, Southwest, Northeast, and Northwest.     I have seen that Williams has started to divide pads in two also.   There may be more companies starting to do this as they drill less and try to hold more land.

Permalink Reply by patty on February 1, 2012 at 9:10am

Chesapeake is doing the drilling, I too was also told that no matter which way the horizontal wells run everyone in the unit shares royalites no matter if they are north or south, run under your property or not, but now that we are in a split unit I am wondering if this still applies.  Our papers state that we are in a pool or unit of 412, now Im not sure if thats just the north unit or includes the south unit too, since we are in a split unit.  Since a unit that is not split shares all I would assume the same would apply to a split unit but dont really know if this is the case. My husband says it really doesnt matter, we get what we get, but I want to know and understand as much as I possibly can.  If we had been on top of things from day one we would have signed a much better lease.

Permalink Reply by patty on February 1, 2012 at 12:34pm

This makes sense to me but with five wells being drilled, which it states on the Marcellus map site, is there anyway to tell which are running n. and which are running south.

Permalink Reply by Finnbear on February 1, 2012 at 4:15pm
You can look up each well on the pad on the ODNR website. With the permit package for each well is a plat map showing the location, length, and direction of each well bore. Which wells are you interested in? Post that here and I will post the plat maps for them, showing where each goes. I am assuming you are in Ohio.
Permalink Reply by patty on February 2, 2012 at 3:44am

No, I am in n.e. Penna., we are on the Zaleski well. 

Permalink Reply by Finnbear on February 2, 2012 at 4:32am

Oops-sorry. I'm not sure where exactly you'd go in PA to find those documents. I'm in Ohio.

Permalink Reply by patty on February 2, 2012 at 9:47am

I would think at our county court house, I will give it a try anyway.

Permalink Reply by Finnbear on February 1, 2012 at 4:09pm
The production unitization map should be on file with your county recorder's office. You should ask Chesapeake for a copy under the premise that you would like to understand how the royalties are proportioned/divided up and paid out or go get a copy from the county. This should clear up any questions about who is getting paid from where.
Permalink Reply by Todd Charles on January 31, 2012 at 6:47pm

With the price of natural gas below $2.50 right now, I would be quite happy to be "HBP" - at least until the price comes up and we all make better returns...  It's like money in the bank - only with the potential to grow greater interest than money can right now !

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