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Permalink Reply by cmorris on February 28, 2013 at 6:11am

As long as your mineral acreage is included in the unit, you will get a royalty payment.

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Permalink Reply by Brian Powers on February 28, 2013 at 3:16pm

Mary Beth - I think that proving that a nearby lateral placed adjacent to your unit and potentially draining the rock under your lease would be a daunting task, indeed.

I'm a qualified expert Petroleum Engineering witness in a couple of midwestern states. I was once defending an application to decrease the well spacing in a 640 acre gas unit in Oklahoma; I proved on the witness stand that the existing two wells would drain more than twice the area of the unit, but the Oklahoma Corporation Commission (OCC) approved the application anyway since they are a very pro-drilling, pro-independent operator state. My proof of the well drainage demonstrated that a third or fourth well would constitute economic waste and should not be allowed.

 

The attorney representing my company was furious with my testimony but agreed with my reasoning and calculations; we were both disappointed with the ruling, but we knew the position and politics of the OCC.

 

My point here is to not underestimate how difficult that it is to prove that any well is draining the rock under lease and under your property.

 

Good Luck,

 

Brian

 

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