Declaration and Notice of Pooled Unit

Just got some papers from CHK today and am wondering if this is the same as division orders???? We have a very small "net acreage interest" in this unit, about .04568.

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Permalink Reply by Bill Barnaby on July 7, 2014 at 9:39pm

If it shows you the acres in the unit, royalty percentage etc. That is most likely your division orders.

Permalink Reply by Greg on July 7, 2014 at 10:06pm

Thanks for the reply. It has acres in unit, all other land owners, plat maps but I don't see any royalty percentage. With such a small amount, .04xxx acres, we may have to send them a check every month. LOL

Permalink Reply by Tom on July 7, 2014 at 10:27pm

Greg,

You have more than .04xxx acres in the pool.  The way CHK calculates for the royalties is to divide the total pool size by the # acres you have in it and the royalty % to come up with a decimal number.  Then they just multiply that number by the selling price of the oil and gas to come up with your royalty amount.

Example: 640 acre pool and you have 10 acres.  10/640 = .015625  

Multiply that by your royalty of 20%... .015625x.2 = .003125

this final # is your net acreage interest.

If the pool made $100000 for a given month.  $100,000 / 640 = $156.25 per acre.  Times your acres in the pool $156.25 x 10 = $1562.50.  Times your royalty $1562.50 x .2 = $312.50.

Or, use the Net Acreage Interest and do one calculation...$100,000 x .003125 = $312.50

Permalink Reply by Greg on July 7, 2014 at 11:01pm

Thanks Tom. Just to get my head wrapped around this thing, the total unit is 563.237428 acres and our net acres in unit are .040650. How many of our acres are being used. Thanks

Permalink Reply by Tom on July 7, 2014 at 11:08pm

You need to know your royalty % to figure it out.  If you are at 20% then you would have 114.478 acres in the unit.

.040650 / 20% (or .2) = 0.20325

0.20325 x 563.237428 = 114.478 acres.

If your royalty % is different just plug it in.

Permalink Reply by Greg on July 7, 2014 at 11:11pm

We only have 35 acres and the royalty is 12.5%. By looking at the plat map, the unit barely touches us.

Permalink Reply by Ed on July 8, 2014 at 8:23am

We also received a "unit declaration and notice of pooled unit".  In our case it was not the same as the division order.

The unit declaration came shortly after the well was drilled.  It listed each individual landowner in the unit and their respective acreages included/percentages of unit held.  

The division order did not come until after the well had been in production but before the first checks were cut.  A division order will list your "unit interest decimal" (figured as net acres/total unit acres*royalty percentage). 

Permalink Reply by Tom on July 8, 2014 at 9:19am

well then, going by what Ed has posted, I would assume that the "Net Acreage interest" is the decimal equivalent to the amount of property you have in the pool.

The plat map you are looking at may be different than the actual "As Drilled" unit size.  The legs don't go in the exact spot they want them to go all the time.  And don't forget the drainage pool from the fracking will extend about 500 to 750 feet to the sides of the laterals.  So if that is the case, then you may have about 22 acres in the pool (pool size x net acreage interest decimal).  

The pool I'm going to be in, the lateral barely touches my property, but the drainage pool has me in for about 12 acres.

Permalink Reply by Kathleen on July 8, 2014 at 10:04am
As far as I know your royalty number is not in those papers, nor is it figured into the decimal number in those papers.
In those papers you should be seeing a spread sheet with everyone's name, how many acres total they have leased and the acres in the unit and the acres turned into a decimal point.
Its all in the division orders. Look for that spread sheet.
They do not give out the info of who gets what royalty percent, that's private and between you and the co.
If one person owned the 563.??? Acres, their decimal point would be 1.
If that person owns 1/2 that acreage alone their decimal point would be .50
Its simple math. Divide your included acreage listed on that spread sheet into the the full unit number. You will come up with the same number CHK sent you in those papers.
Permalink Reply by Kathleen on July 8, 2014 at 10:12am
For others who have not received their division orders, the royalty calculator in the upper right corner will convert your acreage in a unit to a decimal.
Just play with the numbers in that calculator and you will see how it works.
Add 5 acres in the first box, make the full unit 600 acres.
The decimal for that would be .17%
The only reason the calculator is asking you for your royalty %, price of gas/oil is to give the person using it an idea of what they would receive daily.
Permalink Reply by Greg on July 8, 2014 at 10:17am

I gave CHK a call this morning and the guy I talked to could not figure out the numbers either. The guy told me he showed we have 26.11 acres in the pool but then said "that can't be right". He turned it over to a supervisor and promised to have them call me within a day or so.

Permalink Reply by Kathleen on July 8, 2014 at 10:25am
Good for you for calling them.
CHK got my acreage wrong on those papers too. Do you see your spread sheet?
Either way go to the royalty calculator and plug in your known numbers. You will get a very close idea what your true decimal is. The calculator does not go to the 4 or 5th decimal like the co's do but it will be close.

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