landowner

Allocation unit sub units- do they have to be producing?

When an operator joins multiple units together to form a larger allocation unit, do the sub units that make it up have to be producing?  There's a unit designated in a allocation unit that has no drilling permit that I can find, I have never seen division orders on, and have never been paid on.  Yet, they have a unit designation document and say this is how our acreage is included in the allocation unit.  

Thx

Martin

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Permalink Reply by jffree1 on June 10, 2022 at 10:31

It is kind of an "out of the ordinary" situation but I have seen an allocation unit just as you describe out in central TX in the Eagle Ford Shale where the operator joined one producing unit with another unit that did not yet have a well in it. The Unit Designation filed in the county makes it legal, I would think, but I am not a lawyer.

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