More than one Pad on a Declared Unit?

Has anyone heard of a drilling company adding a second pad to an existing unit? Not sure exactly what is going on as the gas company has been very secretive about their actual plans however we are in a fairly large unit (1050 acres) with just 5 laterals drilled on it. Production is decent - not record breaking but not low, either. Pad is only starting into its 3rd year. A lot of room for expansion and no issues with the location or access. The gas company - which recently bought out our original drilling company about a year ago - up and decided to put a new pad even larger than the original one about 4500 ft from the original. This company is very close to the cuff and won't let out any details, even to the landowner where the pad is being located. Most landowners in the unit aren't even aware of the new pad. My concern is what our rights are as landowners within this existing unit. Can the drilling company add a new pad and change the declared unit, effectively taking a portion of the existing unit away? Or would the landowners in the declared unit where the 2nd pad is being built automatically share in whatever is drilled from the 2nd pad, since it is sitting within the unit? I've never heard of this practice and a search has turned up nothing. Our leases (or at least those that didn't already exist from old gas drilling) stipulate pooled unitization clearly as does the signed unit declaration and notice of decimal interests; all signed and filed at the courthouse. The fact that the gas company isn't releasing any information and is downright secretive is a huge concern. Aside from possibly trying to change the existing unit, another concern is the proximity of any new drilling. The buffer that our original drilling company made sure existed would be gone and the very real concern that production would be "stolen" from the original pad once the new pad went into production, sucking the gas our from the adjacent existing pad. This would be no concern to the gas company, of course, since they would get their percentage regardless of which unit it came out from but would be a BIG issue to those in the existing unit who would lose it. I have done an extensive search and found NOTHING pertaining to a situation such as this. Any insight would be appreciated. Thanks!

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Permalink Reply by bo boboski on February 15, 2019 at 12:10am

Maybe, if they build another pad and drill their laterals in the opposite direction, they wont have to shut off the producing wells during fracking.? Just taking a stab at it.

Permalink Reply by Bullfrex on February 15, 2019 at 1:23am

I didn't see where you listed your location (State, County, Twp.).

One thing that jumps out at me is the E&P might be targeting a different formation from the one produced on the existing pad.

Bo might also have a possible explanation.

Have you searched for new permits for this new pad? The E&P would have been required to obtain permits for soil and erosion control before turning a shovel of dirt for this pad. The well permits (in PA anyway) will list the target formation.

It doesn't seem logical that the producer can arbitrarily change unit configuration at will....something else is happening here.

In any event, the producer sees something they like here, which is good news for the area OGM owners.

Permalink Reply by Lori Huber on February 15, 2019 at 2:30am
Good Morning. Thanks so much for your replies. Sorry - didn't mean to withhold anything. No secret. All public record and I didn't intend to leave pertinent info out. I am located in Washington County, PA and my unit is for the Wolverine well pad, put in by Rice Energy, and now owned by EQT, thanks to the sale of Rice Energy to EQT. Rice was wonderful to work with and completely transparent with landowners. We are good friends with the owner of the land in the unit that they have decided to put this new pad on (he also owns the parcel where the current pad is located) and he is as out of the loop as we are and worried what they are up to. When he asks he gets NO info other than that they are putting the pad in and any pertinent info that they have to give him, such as when surveyors will be on the property, etc. Apparently it is twice the size of the original pad, which was huge for just 5 laterals in the 1st place,compared with all other pads in the region with many more laterals on them. According to the owner of that part of the unit, they have everything laid out and it is twice the size according to the survey stakes laid out, and if he stands in the middle of it he can look over right into the existing pad, which can't be more than 4500 ft away as the crow files. I have done a lot of research and can't find any instances mentioned where an existing unit adds a 2nd pad, particularly with such a large existing pad. The goal always seems to be to minimize pads for more laterals, rather than the other way around. IF they drill the complete opposite direction from new pad sight they will go through some of the unit parcels before hitting land not in the unit which would either have to be leased or POSSIBLY could be former EQT leases. Any other direction they would drill would take them through existing Wolverine leased parcels however to make a new pad feasible they would HAVE to add additional parcels beyond the current unit, which would change the configuration of the existing unit OR, my biggest concern, split it off with the 2nd pad in a 2nd unit. Can they do this? Any help figuring this out would be appreciated. One other factor making this all the more mysterious is the speed in which this is happening. Thanks, again!
Permalink Reply by Bullfrex on February 15, 2019 at 3:22am

To my knowledge, all wells are drilled to the NNW or SSE from the pad for both Marcellus and Utica wells....something to do with the natural fissures in the rock.

Again, could it be for a different target formation? This has been explained to me before on a different thread a year or so ago, although in that instance, the wells were on the same pad.

Permalink Reply by Lori Huber on February 15, 2019 at 2:48am
Thanks for the quick reply. I suppose the biggest concern would be the possibility of them creating a 2nd producing pad/unit off of our existing unit, and reducing production for us. It would seem that if the pad is located IN the declared unit leasehold, that it would be a part of activity in THIS unit, particularly when it HAS to go through from a few to several parcels in the unit in order to drill from any direction, even if it has to add additional acreage to the unit. THAT would be acceptable as the unit would contain 2 producing pads, however taking from one to create another is not. We have no real info other than what the gas company has to release in order to proceed. One note: prior to the finalizing of the EQT/Rice merger buyout, part of the due diligence was to have seismic testing completed. I and a few others held out until Rice's legal actually called and asked if we would allow it because EQT was contingent on it particularly in the Wolverine and Mama Bear units. We allowed it. Don't know if that has bearing on anything or not. From all of my research and forum participation over the years, the one thing I've learned is to stay diligent and informed and to not let grass grow under our feet if there is ANY suspected issue because once a gas company gets going, it could be too late to protect your interests. Hence, my query for any info my go to forum here that I can get. ;0) Thanks again!
Permalink Reply by Lori Huber on February 15, 2019 at 3:36am
Anything is possible as we have absolutely no information and the gas company seems intent on keeping it that way for whatever reason. I'm going to look at the county and unit maps to see what parcels will be affected in each direction. It would be nice to think that they are targeting another formation from our existing unit but I wonder if we'll know anything until it actually occurs. As I've mentioned, the goal is to stay ahead of any possible issues and be prepared by researching precedents and possibilities, both pro & con for landowners within the existing unit. We are obviously pro-energy development and always happy to see more production but not actions that may unjustifiably affect production for our existing unit landowners. Appreciate all of the ideas and info.
Permalink Reply by Lori Huber on February 15, 2019 at 10:11am
Good idea! Really rooting for the Rice Team to take over at EQT.
Permalink Reply by Lynn mudder on February 15, 2019 at 3:58pm

Yes,we are hopeful for that also. Day and night difference in how they treat the landowners. 

Permalink Reply by Lori Huber on February 15, 2019 at 10:13am
That certainly would be nice. :0)

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