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Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2014 at 1:52

If your minerals are in LA:  All mineral interests included within the unit boundary receive royalty on all unit wells regardless of surface location within the unit.  A unit order does not require the drilling of multiple wells but if the operator chooses to do so all unit interests get royalty payments from all wells.   I am not familiar with any units being dissolved to be reformed at a smaller size.  Unit operators can seek permission from the state to decrease spacing requirements.  For example, the most common size of a Haynesville Shale unit is 640 acres with 80 acre spacing which would yield a maximum number of 8 wells per.  An operator could ask the state for 40 acre spacing and then the max would be 16.  That's just an example and not a prediction.  In fact Haynesville Shale operators are drilling fewer wells per acre by utilizing Cross Unit Lateral wells.

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Permalink Reply by Bradley Ramsey on June 16, 2014 at 12:48

Thanks Skip.

I know this is a developing play but I wonder how it will pan out as far as number of wells per unit.

I work in completion but never really thought about well spacing and units until i came around that we were offered a lease on our small piece of ground.

I guess it will all depend on how things shape up. I did the drill out on the Anderson wells a few years back and they are good wells thus far.

With as small a piece as I own it will never be retirement money but something is better than nothing.

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Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2014 at 13:23

You're welcome, Bradley.  The ECA Anderson 17H unit is 1074 acres and was approved for 5 wells.  The Anderson 18H unit is 1242 acres approved for 5 wells.  Later units by several operators vary in size up to +/- 2000 acres approved for six to eight wells.

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Permalink Reply by Bradley Ramsey on June 16, 2014 at 18:11

Thanks again. Looks like the units submitted for approval are in the 1,000-1,200 acre range right now.

This is still such a young play it is hard to say how it will all shape up. But working in completions I get a feeling most of what we will see over the next year or two is "lease holding" wells. Once they get the economics of drilling in the TMS dialed in more then I suspect we might see more wells in each unit.

Then again this is the oilfield, so a couple of hot wells and high oil prices could change all that in a relative hurry.

No chickens to be counted yet but it sure looks like the TMS could evolve into a good play.

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2014 at 1:09

Bradley, the most recent 11 MS TMS units approved are an average size of 1957 acres.  You can hold a lot more leases with fewer wells with that size unit. 

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