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Permalink Reply by Mac Davis on February 10, 2010 at 15:04

DON'T SHOUT!!!!!

Anyway, welcome to gohaynesvilleshale.

Is this in Louisiana?

Slightly simplified---

If so, normally, there would only be one unit formed per section, to drill the Haynesville shale formation.

In theory, no one can take your minerals without paying for them, either through royalties on a lease or via payments to UMOs. (Unleased Mineral Owners.)

If you're leased, in theory, it doesn't matter who drills the well or wells. The leasing company (lessee) owes you the royalty payments no matter who operates the unit. It's the lessee's problem to get his money from the operator of the unit. If you're unleased, the operator of the unit owes you money once he pays off the cost of the wells.

In practice, it may be somewhat more complicated, but that's the general idea.

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Permalink Reply by Skip Peel - Mineral Consultant on February 10, 2010 at 15:14

There are a number of reasons that an energy company takes a lease in a section where a competitor has the majority under lease. Small companies incapable of drilling a deep horizontal well may wish to participate in the development of the unit as a Working Interest. Larger, shale capable companies may wish to have a small Working Interest as it gives them access to the science generated by that well (logs, etc.). And in some cases, a company may take a lease that they hope they can swap out for a tract in another unit which is key for them.

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Permalink Reply by sesport on February 10, 2010 at 18:35

re. WI reasoning ... ahhhh, lightbulb here. 80)

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Permalink Reply by Skip Peel - Mineral Consultant on February 11, 2010 at 4:54

Right you are Caliente. Especially in this Play.

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