Units, Pooling, Royalties

I am confused about pooling and units.

 

There is an approx. 800 acre unit that I am a small part of.  The gas company is putting 2 pads within the unit.  It was explained to me that I would get royalties on whatever gas was taken from all of the 800 acres regardless of pad or drill locations.

 

I received a letter showing that a half of my acres were in one of the drill zones for the pad located closest to my house.  The other half were not included.  My friend who lives down the road received a letter stating that he was in the drill zone for the another pad close to his property.  Each of these were labeled as a unit encompassing roughly 300 acres each., but the original unit that encompassed both of us was around 800 acres.  There are other property owners that are apart of the 800 acres, but are not a part of either drill zone off either pad.

 

Will I receive royalties from the well off his pad, and vice versa?  Or will I only get royalties from the well located near my house?  How about the other half of my acres? 

 

Will any of the other neighbors that are in the 800 acre unit get any royalties even though they are not listed in the drill zones off these two pads?

 

Any ideas?

 

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Replies to This Discussion

Permalink Reply by scott brion on April 18, 2011 at 12:02am

Hi James,

 

With the information you give it sounds like the operator may have changed its original plan and split the first drilling into two smaller units.  Check to see if the actual unit name has changed or if the first 800 acre unit name is now applied to one of the new units.   Most leases allow operators to change the size and composition of drilling units at any time.   A company might change a unit in the way you describe in order to work around a fault or other geologic structure for instance.   One other thing to consider is the target formation.  Your units might specify they cover all formations or just the Marcellus or other formations.    If the units cover all formations, you will only recieve royalties for the acres you have in that one unit.  IF multiple target formations are involved, you could receive royalties from more than one unit.  For your remaining acres you will have to wait until to see if the are added to another unit.   If you give me the name of the units, company name and general location, I can look at the unit documents and provide more specific information.

Permalink Reply by FXEF on April 18, 2011 at 6:41am

James,

 

All O&G mineral owners that are pooled in the unit will get their proportional royalty share of what is produced from the unit. Those that are in the drilling zone of the unit and have a pad on their land will receive additional compensation for the surface acreage used for the pad site and roads. The actual well bore lateral does not have to go under a pooled owners land for them to get royalty. 

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