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Permalink Reply by Krkyoldhag on November 3, 2012 at 9:30

Can't help with your location but will share my experience thus far.

Two years ago the oil company holding my lease sent me a PSA..I could not find out anything about them at the time. 

Now they are cropping up in several situations.

They wanted in increase the size of my unit from 630 acres to 1500 acres and I had lots of questions.  They got all the signatures to do this increase in size

Then..not one more word or information about it. Nada. 

I could make all kinds of guesses..  But one thing I do realize is that the company has more options for drilling with larger units.  And the unit they combined mine with was a narrow one ...those lease holders did not have enough area for the deep slant wells..it was to their benefit to sign. 

Whether it was benefit to my unit to increase the size is in question.  Guess we will all know one of these days ...will share whatever info I get on the site here.

One way of looking at it is that in a PSA there is lots more acreage to maybe get a well on... but in my case..they were already planning a well and I will now get less of the revenue from it after the PSA.

Let us know how it works out for you and what you find out.

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Permalink Reply by Eugene Holman on December 5, 2012 at 6:54

my source at anadarko says that the lawyers are getting to much involved.seems like a perfect place for them to make more money

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Permalink Reply by Skip Peel - Mineral Consultant on December 5, 2012 at 9:09

Larger units are the result of increasing horizontal drilling.  Vertical wells work just fine in small units, horizontals do not.  In general operators want larger units for longer laterals which reduce their cost to produce an mcf or a barrel while lessors fear dilution of their royalty interest.  IMO, once a particular formation is known to be sufficiently productive in a defined area larger units are acceptable as long as the increase in acreage is accompanied by a corresponding increase in the number of wells that can be drilled in a unit or increased production per well.  In those cases both parties benefit.

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