Please help the uninformed!!!!!!!!!!!!!

I am in the medical field and know nothing about this business. Thanks for everyone that has contributed to this site. Everything I know about leasing, drilling, production, etc. (as little as I know), has come from reading this site.

Here's a simple question that I don't know about. If 1 well (and I understand only 1 well can be the primary well) is drilled and producing in a 640 acre section, do the royalties go to only those land holders in that particular section?

I live in the city and my section (T16N R14W S9) has some available areas for a well or two. Neighboring sections are all residential and have little or no acreage for wells. Will they receive royalties from neighboring sections?

How does all this royalty stuff work?

Thanks in advance for your input.

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Permalink Reply by Two Dogs, Pirate on July 27, 2008 at 5:17
Yes
Permalink Reply by Two Dogs, Pirate on July 27, 2008 at 5:20
Randy the people in South Rapides Parish are still waiting for the additional wells to be drilled on the HBP acrage in the Austin Chalk held by Chesapeake since the mid 1990s.
Permalink Reply by Randy on July 27, 2008 at 5:53
I understand you can always find exceptions and examples. In this case, there is SO much money invested, I don't care if I never hear the words "the investors" ever again. I just don't believe it will sit in the ground, I could be wrong I suppose.

Randy
Permalink Reply by Two Dogs, Pirate on July 27, 2008 at 6:09
I agree this formation will be drilled but there is going to be problems in holding their interest for the amount of time necessary to do the drilling. Large units are one of the ways the companys will use to get to their goal of holding as much land as they can without going back in and re-leasing or extending at much higher prices than todays.
Permalink Reply by Les Bamburg on July 27, 2008 at 5:39
Chelle, to date there have been no geograhical units larger than 640 acres.
Permalink Reply by insomniacnla on July 27, 2008 at 6:10
I heard the Commissioner, Jim Welsh, state that his office had not received any requests or any units larger than 640.

Also, in neogitating with Chesapeake, their first lease draft had the pooling area of up to 1920, but as soon as I asked for the limit to be a 640, they agreed to it and changed it to 640 with no problem.
Permalink Reply by Two Dogs, Pirate on July 27, 2008 at 6:13
Good reply, people listen to this and ask for the same.
Permalink Reply by TCB DS3 on July 27, 2008 at 9:35
We are in a 940 acre unit so units can be larger than 640. TCB O
Permalink Reply by insomniacnla on July 27, 2008 at 12:01
Really? I have seen units smaller with the shallower wells but 940 acres is sure news to me. Thank you for letting me know. Was it on an old well and done some time back? Are the royalties paid out on a 940 basis?

Just make sure in your new lease that you limit the units just to be sure.
Permalink Reply by TCB DS3 on July 27, 2008 at 9:40
Read this site's post you will learn a lot very quickly. If you want other sites which inform owner's let me know and I will send you a list. It is worth the time to read and educate yourself. You will be amazed how much you can learn in a few hours and it is well worth the your time for the amount of money you will not leave on the table. TCB O

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