Drilling unit vs production unit

There is an interesting discussion on the Ohio Landowners page re. drilling units and production units. If I understand it correctly, it is possible to be in a producing drilling unit and still not be paid royalties because you are not in a subset called the production unit. This is new to me as I thought that if your land was in a drilling unit, you benefitted from all of the wells drilled in that unit. Is this new or did I miss something in discussions about the potential benefits of being in a larger unit?

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Permalink Reply by Kathleen on February 13, 2014 at 11:08am
ODNR is only showing you the leg, not the unit. And only the names of the people in that leg not everyone in the pooled unit.
Permalink Reply by Kathleen on February 13, 2014 at 11:03am
To see if it is listed online put in a mineral/landowner you know has to be in this unit. If nothing comes up then I would assume it hasn't been filed yet.
Also my county has two online sites. One shows everything that has happened on a deed while the other one just shows property cards. You do not want the property card section.
All you need to do at the courthouse is look up your parcel, and if one is there it will tell you the book and page number for the pooled unit.
The declaration of pooled unit will tell you how many acres or unit % each mineral owner has in the unit. Mine showed how many acres were leased and how many were included in the unit. This was done for each owner in the unit and was done for every "declaration of pooled unit" I looked into.
Nothing on royalties. As far as I know that is not fall under public knowledge rights.
One other thing. If its not on your deed then ask the clerk since it could be too new for them to have scanned into everyone's deed. If that's true, then the clerk has it in hard copy form, which means, most likely you will pay more for copies.
When it comes to copies, ask to see the whole document and only have the pages you wish copied. There are pages and pages of just letters from each co., that has a stake in that well okaying the unit. I can't imagine you would want to pay up to $2+ per page of nonsense, if the document hasn't been scanned yet. You will get the whole thing in time from the driller.
Permalink Reply by evan on February 13, 2014 at 11:15am

 Thanks. I ll try and look into it more and I'm going back to odnr s page and look again who's receiving royalties from that one lateral.. Also this is CHK were dealing with is their anyway they can do it the way I described .  Is this situation like yours  ?   

Permalink Reply by Kathleen on February 13, 2014 at 11:25am
CHK has a few wells we know of in Carroll with very small declaration of pooled units.
No, if the 160+ acres is in that 600+ acres then the whole 600+ is in on that one leg.
Last year when I saw all these units at 150-170 acres I knew this made no sense. CHK had to hold more acres with one well, so off I went to the courthouse and looked up every well around me. All of them were bigger then the ODNR was showing.
I'm not sure why ODNR does it this way. Is it that they do not care about the full unit and only care where the well is in the unit? Or do they update the one leg info with the whole pooled unit later?
Since I hate the ODNR site I've never gone back to look at all the wells (pooled units) I looked into at the courthouse.
Its a bunch of fun to pull up the whole pooled unit and see your name!
Edit: another avenue is to call CHK directly and ask them how big the full pooled unit is. Make sure they know you are asking about "the declaration of pooled unit". Personally I feel it's faster to go to the courthouse. I've been on hold with CHK for an hour once,45 another time and 3 minutes another time. It's all about timing I guess on how busy they are. I hear Mondays have the longest wait. My longest was on a Wednesday.
They can also just tell you or anyone who has your parcel number and county name if you are apart of this unit.
Permalink Reply by evan on February 13, 2014 at 11:40am

Thanks for the info. I give up on calling CHK.  I've left messages 8 times last week about a different matter and no one calls. Heck I'd be happy to be on hold with them. Haha now I'm going to do more checking into this. You have my hopes up now but I know better. Thanks for putting me in my place.. I ll see what I can find out 

Permalink Reply by Kathleen on February 13, 2014 at 12:40pm
When I've called CHK I've never got voicemail. I just called customer service. Google that number.
Just to torture myself I went to my well on the ODNR site and no where do I see the full production unit that is on my deed.
It still only shows the one leg of 153 acres and the "declaration of pooled unit" shows 500+.
I hope I was not rude. This is a subject that's tough to wrap a brain around when the ODNR only shows the legs, not the full units.
Permalink Reply by evan on February 13, 2014 at 10:56am

Yes I already have all that paperwork that shows everyone's acres in the 633 acre production unit. It shows what every landowner contributes acre wise. But they put together the 137 acre drilling unit and on the permit it shows everyone who will get royalties and its only the ones that the lateral goes through or close to. So in my eyes and other people I ve talked to I won't receive royalties or I would have been listed as a person that will receive royalties.  I hope your write Kathleen but I don't think I am that lucky

Permalink Reply by Bill Barnaby on March 18, 2014 at 3:36am

This thread has raised a question from me, they're trying to get us to sign a pooling amendment (from less than 640 to 1280).

Right now there is a well permitted and we're in a unit... but the unit is bigger than our lease allows. There are no other wells on us (vertical or otherwise). Is this still something they can do, do they prefer to do it this way if you don't sign? 

Can we be thrown in a small production unit?

Permalink Reply by Kathleen on March 18, 2014 at 3:49am
When the drillers come knocking for you to raise your acreage limit you know you're in a unit. I know you already said you know but that's for others to read later in time.
Its a judgement call on the owner of the minerals. Do you trust this driller to drill 4-6 more wells to warrent diluting your %?
Most people do not.
If they do drill the whole pad within your lifetime, I feel its better to be in a bigger unit, since your odds go up on hitting a sweet spot.
I was asked to go up to 1280 and said no.
Permalink Reply by Bill Barnaby on March 18, 2014 at 4:00pm
Great info, thank you. Did you ever demand money to sign or receive any counter offer?
Permalink Reply by Kathleen on March 19, 2014 at 12:54am
Hi,

I asked for a higher percentage and they said no real fast. I asked for a strata release and the guy thought that might be a yes. He called back a bit later to say they said no.
Permalink Reply by The Hiker on March 20, 2014 at 1:30am

I just read this thread for the first time, and wow is this confusing.  I have friends with large acreages who are HBP by Oxford/Eclipse and have leases that only allow 160 acres as a maximum pool size.  All of them have been approached by the company to sign an addendum to increase this (for pennies).   My question is:   Can Eclipse get around the pooling restriction (and the landowner's demands for fair compensation) by splitting the acreage into separate units (drilled from a common pad), where each "unit" is less than or equal to 160 acres?  I doubt it, or Eclipse would just go ahead and do it, rather than offering them any money at all, and taking the time to send a guy out to hassle them.   Sounds like a question for the attorney.  Comments?

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