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Permalink Reply by Melinda on April 3, 2009 at 9:44

If someone could help me understand. Our property, in Bienville Parish, is leased by Chesapeake. The unit was set-up by Will-Drill. According to page 20 of this presentation Questar E&P non-operated leasehold (Haynesville or Deeper) on our section 14-15-10. Someone please explain. Thank You

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Permalink Reply by Grillin' - MmmMmm on April 3, 2009 at 16:42

I think this is what is going on:

your property is leased by CHK, but lies within an area where Will-Drill has the majority of the acreage. So Will-Drill sets up the drilling unit and will operate the unit. CHK is a non-operating WI owner within the unit. Questar also has some land under lease within this unit, that Will-Drill will operate. a unit is roughly 640 acres and the operator may or may not operate the entire thing. Other companies could have obtained some of the leases within the unit.

Now, who pays you your royalty? Well, Will Drill is accountable for measuring and reporting the production and dividing it amoungst the WI owners. and generally, each WI owner is responsible for paying their own royalty owners, although sometimes the unit operator might pay all the royalties, but not usually. This area is one that Jim krow or KB or others could correct me on.

But needless to say, this isn't an unusual situation!

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Permalink Reply by Grillin' - MmmMmm on April 4, 2009 at 9:20

I caught an error in my first paragraph. I said "the operator may or may not operate the entire thing"; that should have read "the operator may or may not have all of the acreage in the unit under lease". Meaning in some/many units, the operator is not be the only lessee in the unit.

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Permalink Reply by Spring Branch,mineral owner on April 3, 2009 at 12:23

It is not an accident that the sweet spot just happens to be where Questar's acreage is. Though I must admit that there acreage is in a pretty good position.

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Permalink Reply by BirdDawg, plain ole' idiot on April 3, 2009 at 13:30

Hey Spring,
I hope Questar is in the sweet spot, most of my acreage is in Alabama Bend.

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Permalink Reply by Spring Branch,mineral owner on April 3, 2009 at 16:22

I've got a little acreage in the Thorn Lake Field myself. Questar is all around me. Making good Haynesvilles and horizontal Cotton Valley wells too.

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Permalink Reply by BirdDawg, plain ole' idiot on April 4, 2009 at 2:25

Ha

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