Property "units"

In a earlier discussion Mr. Knapp explained that the gas co. will assign the units for production useing "unit operation designation" filed at the court house, he also explained that these units could be any size because Pa had no legal limits other than what was stated in your lease. In the lease that I have been presented with it stated "no units can exceed 640acres plus 10% or 704 ac. I was wondering what the typical unit size is in Pa? Is it all based on the geological investigations? It's only logical that royalties would be higher for each landowner in a smaller unit. Has anyone heard of a unit that is has a 100acres or less?

 

 

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Permalink Reply by Dan on January 30, 2011 at 7:57am

Thanks - But can you still define 'unit' for me?  Is the total unit size based on my 500 acres + (5 neighbors *100ac) = 1000 acres?  Or, is the 'unit' redefined when the well horizontals are laid out?    I thought I've been reading other posts that say unit size is limited to 640 + 10% = 740 acres.  And, if there is a limit, then aren't these units being redefined based on the pull area, rather than what those pre-existing land boundaries (and original 1950 gas lease) are?  Then, somewhere, there's 260 acres (in this example) that are being left out??? Sorry for my being a little thick about this concept.  

Permalink Reply by FXEF on January 30, 2011 at 2:43pm

Dan,

Here is a link that may help you understand more about O&G units in PA. 

http://law.psu.edu/_file/aglaw/SummaryOfOilAndGasConservationLaw.pdf

Permalink Reply by Sarah Violet on January 28, 2011 at 1:31pm

Thanks FXEX , you just answered one of my questions. But I have another. How important is it to the Gas Company to get the property in the middle of a " Unit"  leased ?   If property is a corner lot , sitting at the cross roads of a well traveled road  how important is this to a Gas Company ? Sorry that's 2 questions.

Permalink Reply by FXEF on January 28, 2011 at 2:20pm

Sarah,

The O&G company will normally have a lease block, then form the unit from that lease block, therefore eliminating unleased tracts from being included in the unit. Just because there is a tract surrounded by leased land, could or could not be to the owners advantage. There is just too many factors that come into play to say that one certain tract is more important than another.

 

 

Permalink Reply by Robin Maines on March 31, 2011 at 2:38am
Is there some place to ck and see which "unit" your property is in.....
Permalink Reply by FXEF on March 31, 2011 at 4:44am
You have to go to the courthouse to see if a "Declaration of Pooling and Unitization" has been filed.

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