Replies to This Discussion

Permalink Reply by DSR on May 13, 2015 at 14:49

Never mind. I got it.

Permalink Reply by Skip Peel - Mineral Consultant on May 13, 2015 at 14:51

The language regarding "..cased and cemented back above the top of the Cotton Valley Formation Reservoir A...." is standard boiler plate language for a unit designed for drilling horizontal wells.  The more important portion is what comes next, "..the distance to any unit boundary or offset well will be calculated based on the distance to the nearest perforation in the well, and not based on the penetration point or terminus".  In other words all distances are calculated from the closest perforation cluster in the horizontal well bore.  No perf cluster may be closer than 330' from a unit boundary (excepting an HC or Cross Unit lateral well) or to the horizontal lateral of an adjoining well.  It does not matter where the horizontal well bore enters the unit (penetration point) nor where it stops (point of terminus).  Only the distances to the closest perforation point matters as to unit boundary set backs and to the spacing of any adjacent horizontal wells drilled in the unit.

Clear as mud.  Right?

Permalink Reply by DSR on May 14, 2015 at 11:38

That's very helpful, Skip. Thanks. I appreciate it. However, it is discouraging to think that the drilling company may come onto my property to conduct their drilling operations and I could derive no benefit if the nearest perforation is in the next unit over from mine. I guess everybody's in the same boat on this.

 

Permalink Reply by Skip Peel - Mineral Consultant on May 14, 2015 at 12:00

If you have a standard lease it likely allows for surface access/use in the process of development.  One of the drawbacks to negotiating a lease without the assistance of a professional is leaving money on the table.  An experienced O&G attorney would have been prone to include one or more clauses regarding surface operations and compensation for such.

Does the plat included with the notice letter indicate that your property will be utilized as a surface location?  Is it a unit application or an alternate unit well application?