How a drilling unit is paid out?

Does anyone know how they pay out a drilling unit? do you get paid on the percentage of land you hold in the unit or do you only get paid if your so many feet from the lateral?

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Permalink Reply by Mike Fulper on March 18, 2014 at 4:22am

Our Amarado Riggens lease.. states No deductions on the OIL...

BUT   they can deduct for all; else. gas etc..

We don't care about gas.. OIL is the $$ maker...:)

By the way.. our lease is only 4 pages...

Permalink Reply by robert c miller on March 20, 2014 at 5:19am

Iam 3% of a unit and royalties are 15 1/2 % of that 3%.

Permalink Reply by Brian Werner on March 20, 2014 at 10:36am
There is a technicallity that I have personally run into in western Carroll county and I didn't see anyone mention it. If your property is in an existing vertical well unit, your royalty will be based upon your percentage of the vertical unit times the vertical units percentage of the horizontal unit - not your acreage in the horizontal unit. So indeed it is possible that you may have no acreage in the horizontal unit but you will recieve a royalty from it by way of your being in a preexisting vertical unit that overlaps it. On the other hand if your acreage is in the portion of the vertical unit that is also in the horizontal unit then your royalty will be less than if you were only in the horizontal unit because your share is divided up with everyone in the old vertical unit according to their percentage of the old unit. For example if you have 40 acres in a 160 acre vertical well unit and then a 200 acre horizontal unit overlaps on 80 acres of the vertical including your 40 acres. You won't get a royalty off of 40/200=(20%)of the horizontal. Your royalty will be off of 40/160 times 80/200= 1/10th (10%) of the horizontal.

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