pooled unit divisions

can anyone that has interest in a pool answer this?

if you have a 175 acre lease, they put 2 wells on your land, and you are pooled within a 1200acre unit, do you receive more for the wells on your section then you do for the other 2 wells [neighbor]  or  is it dived all the same? cant find out how this works.

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Permalink Reply by Todd on February 11, 2014 at 1:56pm

Your decimal interest in the production of the wells is calculated as such:

amount of your acreage IN THE UNIT divided by TOTAL UNIT ACREAGE times your royalty percent.

Everyone shares in the production money on a pro rata or per acre basis.

Therefore, the answer is: Divided all the same.

Permalink Reply by TM on February 11, 2014 at 1:56pm

If your land is pooled into a unit everyone in the unit shares in the royalties. What do you mean by a 175 acre lease? Do you have older shallow wells on your property and are Held By Production?

Permalink Reply by bbqfreak on February 11, 2014 at 2:52pm

no , we have 175 acres that we leased  and is in a 1200 acre unit. just wanted to know since 2 of the wells are going on our 175 if it made a difference on the royalty, thank you

Permalink Reply by Elnathan Cory on February 11, 2014 at 4:50pm

Short answer: You are gonna be rich!

Permalink Reply by Todd on February 11, 2014 at 6:03pm

BBQ,

It makes no difference on the royalty.  All that matters is how many of your 175 acres are in the 1200 acre unit.

Check out your lease though - you might be and should be compensated for having the well pad on your property.

Congrats!

Todd

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