Anyone Familiar with Non-Typical Unit Sizes and How Unitization of These Units Works?

Hoping someone here has knowleged of how Unitization, more specifically when additional acreage is added to Non-Typical Sized Units, works. For example, my family is receiving royalties on 2 wells that were drilled by combining 2 leases, 200 acres owned by us and 100 acres by someone else. These 2 wells have been in production for over 2 years and the operator has come back and drilled 2 more wells, but they had to add another 100 acres to the total production unit. Based on the decimal interest, I don't believe the newly added acreage was included in the 1st 2 wells. The newly combinded unit of 4 wells has not been brought online yet and we've not seen what the new decimal interest is so not really sure how this will play out. In this scenario, it would seem like the owners of the newly added 100 acres missed out on significant royalties when the original 2 wells were brought online and now they are sharing with the unit moving forward.

Now it's not my place to argue for these folks but I would certainly not want this to happen to me or my family. We have other acreage that that this same scenario could play out with this same operator and I would want to be leased and included in the payouts from the beginning, rather than being added in later if this is how acreage is added in.

So I guess my question is, does anyone know how operaters payout to acreage added to these types of units or do they know if it's more beneficial to be included in these units from the beginning based on the scenario I've described above? Just looking for confirmation as this could greatly impact royalties on many of our properties.

Thanks in advance.

Views: 135

Reply to This

© 2020   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service