Replies to This Discussion

Permalink Reply by jffree1 on March 10, 2010 at 16:07

We were just talking about that over on the Sabine page. Odd isn't it?

Permalink Reply by j garrett on March 10, 2010 at 17:00

I've seen large units as well, but just didn't how or why, or why not. Care to explain the general thinking?

Permalink Reply by j garrett on March 10, 2010 at 17:37

There's more to it than that. Why do operators form multiple adjacent & contiguous units, as opposed to one big one? Why are some tracts left out and some leases allowed to expire if you have a little too much acreage, ie more than 704? Why didn't they just file for special field rules? Any experts out there with an answer? Skip Peel? Baron? What do you think?

Permalink Reply by ogmladvisor on March 10, 2010 at 18:03

There is no such thing as a "704 acre max rule"...

The answer you seek....is "Rule 86"

Permalink Reply by jffree1 on March 11, 2010 at 3:30

I think this is what you are referring to. Correct me if I'm wrong, please.

T16S3.86(d)(1)

http://info.sos.state.tx.us/fids/16_0003_0086-1.html

Permalink Reply by adubu on March 11, 2010 at 7:04

jffree1---go to www.rrc.state.tx.us/rules/rule.php----click rules then click current rules---click on chapter 3 oil & gas division--then click 86

Permalink Reply by j garrett on March 11, 2010 at 9:55

Yep that works jffree1 & adubu, Thanks. The answer is the maximum size of the unit is dictated by lateral lengths on horizontal wells. The Cabot Walters Well has a 4747.06' lateral. The chart on the above link shows laterals 4,136 to 4,962 ft long can add 240 acres. So, 640 +240 is 880 acres. This unit is 878.34 acres, so that jives. Laterals over 4962 can add 40 aces for each additional 827 ft in length. Does that sound right everybody? ogmladvisor?

Permalink Reply by jffree1 on March 11, 2010 at 10:23

The only question I have is that rule 86 is concerned with Proration Units. There is still a matter of the language of the pooling clause in the leases. Pooled Units and Proration Units are not synonymous.
So, to me, there appears to be a conflict between the operators desire to hold as much land as possible with one $10MM well and the mineral owners desire to not have their interest in the unit diluted any more than necessary.

Permalink Reply by jffree1 on March 11, 2010 at 17:07

What area? I've heard that about south Shelby Co..

Permalink Reply by ogmladvisor on March 11, 2010 at 17:51

Yes, you are correct J Garrett

Permalink Reply by ledlights on March 13, 2010 at 7:28

jffree1 - have you elaborated somewhere on GHS on your comment about $5K bonuses in South Shelby? If not, could you add any info about which companies, how recent, more specific location, etc.?

Permalink Reply by jffree1 on March 13, 2010 at 11:46

There was a brief discussion posted by King John about two weeks ago on the Shelby County page. He's said he heard the area was Shelby County where the three counties (Shelby, Sabine, San Augustine) converge. What was said then was that Paloma was offering 5K and XTO was coming back over them with 6K. I don't know anyone who has signed a lease at those rates. It is rumor until someone steps up and says they signed for that.

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