Eclipse and unit size question

We have been notified by Holland Services that Eclipse wants to increase the size of unit from 640 to 1280 acres. Will this have any negative output with a size increase ? They have sent an amendment to our lease for signing. I'm not all that familiar with unitization, so I'm hoping someone could let me know if this is something that needs to be dealt with by an attorney or not. Any input is greatly apprciated.

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Permalink Reply by Jeffrey Beunier on June 28, 2018 at 12:09am

Ray...your 20% gross royalty most likely applies to your acreage - when pooled or unitized your royalty share of the unit is based on the number of acres you own divided by the number of acres in the unit multiplied by your royalty rate.  So yes, if you look at your check, its going to show a number less than 20%, but if you run the calculation you will see that you are getting a proportional amount of the entire unit.  If you aren't, then there is something wrong with the calculation on the division order.

Permalink Reply by David Allen Lilly on June 28, 2018 at 4:09pm

The guy we hired for all things oil and gas:

http://www.bricker.com/people/aaron-bruggeman

I would sign nothing in this day and age without counsel.

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