Unit and Drilling Question

We are part of a Unit with one pad and six horizontal wells. We are only being paid for the production of three of these wells. Possibly, there is no production yet from the three we are not being paid for and there are no production numbers listed from the state since it is a new site. My question is whether the drilling company could have used that one pad in our unit to drill those three wells into a different unit (other than ours) and therefore we would not be entitled to anything from the production of the other unit. Does this happen?

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Permalink Reply by Clinton44 on May 18, 2014 at 5:35am

Hi Jim,

We have acreage in Clinton and Lycoming Counties in PA. We are in two seperate units which both have six wells on each pad. However the one unit is split into North and South units. On that particular unit we only receive royalties from the three wells in the south unit. On the other unit we receive royalties from all six of those wells.

So yes split units do occur.

It can be very confusing especially when the original company that you leased with sells or trades full or partial interests in the wells with other gas companies.  

Permalink Reply by beth hamm on May 18, 2014 at 6:48am

How do you know how much they sold to other companies and who is responsible for payments? Should one expect a check from each company listed on the pooling unit????  All so confusing!! How do we know the percentage each company pays? 

Permalink Reply by Clinton44 on May 18, 2014 at 7:08am

Depends on the agreements between the companies. We found out as the dsivision orders started coming from the other companies. Their percentage of ownership interests was listed on the division orders and informational letters that accompanied the division orders. as was our owner decimal interest listed on the division orders in accordance with the amount of acreage we hold in each unit.

As far as who to expect the checks from that is a toss up as well at times.... To start out we received royalties from Anadarko and Ultra Resources until their partner Mitsui decided they wanted to market their own share of the gas instead of letting Anadarko sell it for them. Now we get checks from all three of them.

  

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