I saw your eariler comment that you were experienced with O&G companies from the Barnett Shale. Can you shed any light on this provision of the lease? How should the blanks be filled in from the royalty owner's perspective?
(i) If the well is classified as an oil well under the Rules and Regulations of the Railroad Commission then in effect, the maximum size of the production unit shall be ________ acres if the well is producing from formations less than________ feet beneath the surface, and ________ acres if the well is producing from formations below ______ feet beneath the surface.
(ii) If the well is classified as a gas well under the Rules and Regulations of the Railroad Commission of Texas then in effect, the maximum size of the production unit shall be____________ acres if the well is producing from formations less than _________feet beneath the surface, and ______________ acres if the well is producing from formations below ____________feet beneath the surface.
(iii) If the well is classified as a horizontal well (whether oil or gas) under the Rules and Regulations of the Railroad Commission then in effect, then the maximum size of the production unit shall be determined by the following formula: 80 + .08126 X A, where A = the length of the horizontal lateral component of the drainhole of the well.