I need help on what to do about receiving production sharing agreements to allow horizontal drilling across existing pooled units? If my family doesn't sign, can they do it without us? I would appreciate any input--thank you!
I think the magic number is 65%. If they get that many to agree to production sharing they can get the permit for an "allocation unit" that allows horizontal wells to be drilled across two or more previously permitted units. There has been a little bit of discussion about this before. You should be able to find it by searching for "Production Sharing Agreement".
kaki and jffreel---go online to the --NARO message board forum index-- type this on google search--- then click same 1st listing-- then click on TEXAS--- the lastest topic covers what infomation you asked with answer by RD Cotten who is knowlegeable on oil & gas subjects. Supports a legal augument about what you said about 65% Need good oil & gas attorney to answer. By the way do we have any members on Go Haynesville shale that are o & g attorneys????
The 65% figure is correct and I recommend that you have an oil and gas attorney review it before you sign. I was in the same situation and my attorney forced a couple of changes concerning hold harmless clauses and field spacing rules so that current wells would not be drained too quickly which hurts long term production.
Definately spend the money to talk with a Board Certified O&G atty. Remember oil co's dont care how the royalty is divided among the royalty owners and obviously they want to be able to drill 1 well and hold 3 units than have to drill 3 wells in 3 units. And please dont make the mistake of signing a document oil co asks you to sign; it will always be written for the benefit of the oil co and NOT you...no matter what the oil co / their landman tells you to the contrary. Have your own document written up for them to sign. My experience is it has always been the thing to do.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More