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Permalink Reply by Eat Beef on October 18, 2008 at 13:52

Most of the answers to your questions are unknow to me, but I do think a gas unit, is around 650 acres, and I think a oil is much less, but I don't know how much, maybe as little as 50 acres. I'll wait to see who answers these question for you, and we'll both know.

Permalink Reply by Texas on October 20, 2008 at 5:05

I hope this is not too late but here are the industry standards for your questions. Do not sign a lease with blanks in it either.

Oil well generally produce on 40 acre units
Gas wells can very between 80 acres and 640 acres all with (10% tolerance so not to leave small partial tracts out when pooling.

You as the lessor can limit the unit size for a gas well even as to certain depths. If you have a small tract you benefit more from a smaller unit (ex: 40 acres in a 640 acre unit is 6.25% of the unit...this would be multiplied by your royalty in the lease...if 25% your royalty would be about 1.5% of all the production from the unit) If you have a smaller unit (40 acres in a 160 acre is 25% of the unit...if 25% your royalty would be about 6.25%).

If you own larger tracts, larger units simply means the lessee can hold more acreage with less wells but that does not mean they will drill less.

The depth and size is your call, however shale plays call for horizontal drilling and the O&G companies require the space to make the long laterals to make the well economic so 640 acres are generally the rule of thumb. I would not allow for much more. Shallow vertical wells like cotton valley wells are generally drilled on 640 acres but they can drill multiple wells in large tracts and although you may get a smaller piece of the production if they drill more wells then you get a chance at more production.

I hope some of this helps.