Replies to This Discussion

Permalink Reply by Nat Gas Engineer on May 2, 2022 at 9:01

Yes, it is a cross unit lateral.  There are several of these types of wells in the area. There is one (actually, two Boll Weevil wells H3/B3) that do that.  

Permalink Reply by Mister Sunday on May 2, 2022 at 23:58

The strange part to me is that the well only goes a few hundred feet into the other unit. How do they determine the percentage that is to be split?

Permalink Reply by Skip Peel - Mineral Consultant on May 3, 2022 at 1:31

A percentage of the wells production will be assigned to each unit based on the percentage of perforated lateral that lies within each.  In Louisiana, the operator files a report with the state providing the linear feet of perforated lateral and the percentage assigned to each unit that the perforated lateral penetrates.  I suspect that Texas has something similar.  If so, Julie can probably tell you how to get a copy.

Permalink Reply by Mister Sunday on May 3, 2022 at 9:20

I see Black Stone owns most of the A 47 Unit.

Permalink Reply by Chloe on May 16, 2022 at 17:50

I see this is called an allocation unit/well  .. It is between Keydets and A 47.  My question is I thought DO or something similiar had to be signed by all involved..  I have not signed anything from XTO since some years ago. (like original lease papers)..  I don't quite understand the legal jargon while reading about allocation wells. Different words come to mind like illegal, forced pooling, the RRC is not responsible for that just permits and so on.  So I guess the ? is will we all be getting orders to sign on this new H 4 and hopefully a H 3 ..... or they do not have to have us sign. ?

Permalink Reply by jffree1 on May 17, 2022 at 1:45

You would eventually receive a Division Order to sign on each new well. They are not doing anything "illegal" and there is no force pooling in TX, generally speaking.

Permalink Reply by Mister Sunday on May 17, 2022 at 7:59

If I remember correctly, Blackstone A 47 was a barnburner, wasn't it?

Permalink Reply by jffree1 on May 23, 2022 at 1:42

Yes. The  IP was over 30MM, as I recall.

Permalink Reply by Mister Sunday on May 17, 2022 at 9:24

So I have a question. Hopefully the files I picked show up to make the easier to express.  The LTP for 4H is only a few hundred feet into A 47, but on the drilling permit it lists 1294 acres. Do you mean to tell me they can include all the acreage from that other unit by just going a few hundred feet into it?  I'm not liking the way this is looking.  I sure hope someone can explain this to me in such a way as to satisfy my curiosity and assuage my suspicions.

Attachments:

• BSI Keydets a 47 PLAT Doc1.pdf, 84 KB
• BSI Keydets a 47 drill permit.pdf, 134 KB

Permalink Reply by jffree1 on May 23, 2022 at 1:55

Your royalty, on a PSA well, is calculated using your decimal interest in the Keydets unit and the lateral footage drilled within that unit. The total PSA Unit acreage shouldn't alarm you as it does not have a role in determining what your royalty % is.

If the lateral is 6000' long and 500' of it is drilled in A47 and 5500' in drilled in Keydets then you have to find a ratio for each section of the lateral.

500'/6000' = 0.083333 for A47

5500'/6000' = 0.916666 for Keydets

Then you multiply that ratio X your decimal interest in your unit.

Permalink Reply by Mister Sunday on May 25, 2022 at 4:23

Thanks, I fully understand your explanation.  Still feels a little sus' to only go a few feet into another unit, but I suppose They can't have the PP and the TP exactly on the borders of the plats.  I just always pictured CULs going perpendicular, all the way across several units to the original direction of the first wells. 

Permalink Reply by jffree1 on May 27, 2022 at 2:05

They will all generally lay in the same orientation as the original well. They can, with PSA units, use some creativity in pad placement to reach the most acreage with multiple laterals from a single pad. That is one of the ways they trim overall cost in drilling these wells. They are so expensive that the operators snip and trim every bit of expense they can to help make them economical to drill. If they can walk or slide a rig over fifteen or twenty feet to drill the next well rather than truck it to another pad that saves a lot of time and money and allows them to drill multiple wells in stages at the same time.

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