Replies to This Discussion

Permalink Reply by essay on April 27, 2010 at 19:50

as far as the "merits" go, the baron settled the issue on that score as far as i'm concerned.

and yes it is a waste of our money all around, at the risk of being labeled anti government or whatever.

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Permalink Reply by Henry on April 28, 2010 at 0:02

Parker,
I will disagree with you a little bit.... I'll preface my comments by saying I don't see how to do things better. But, there are some people who got hosed because of the law.

Think of the small landowner (say, 40 acres) who is in a section with a very large landowner (say 300 acres). If the large landowner chooses not to lease, then the small landowner will never get a penny. He gets nothing, through no fault of his own.

Also, there will be many sections where the small landowner, sitting on the northern or southern boundary gets a huge hit for drilling activities, while those in the middle take no hit.

One purpose of the law is to protect the minority from the majority and to protect those not in power from the powerful. There are times when the current law results in the minority or less powerful getting screwed. Having said that, I don't know of a way to fix this. Maybe others can think of a way.

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Permalink Reply by Steve P on April 28, 2010 at 5:57

Henry: I'm one of those landowners. The biggest landowner in my section has never (okay, not in the last 30 years) signed a lease on the property adjoining mine. Reducing the size of the unit would certainly benefit me in that regard - BUT ONLY ASSUMING THAT THE 80 ACRE UNITS WERE ALIGNED JUST RIGHT FOR MY LAND, but it doesn't solve the problem in general. There will always be landowners who won't lease or hold out, and the operators give up and move on to the next section. If DNR was to go to 80 acre units (and Bobi Carr nails this one pretty well), those units could not be gerrymandered, as some have said in this string, to work around unleased owners. So the 40 acre guy could still end up with the other 40 belonging to that obstinate large land owner. The only way to deal with that issue would be to abandon the force unit concept completely - ever been to Kilgore, Texas? That's not going to happen.

I agree that those on the section lines could take a huge hit from drilling activities - an outcome almost guaranteed if the units were drawn in long narrow stips. The current plan that operators are proposing is to use a single pad to drill multiple wells - a great, environmentally-sound goal that would be thwarted by this law suit being successful.

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Permalink Reply by The_Baron on April 28, 2010 at 9:13

maybe we could use zig-zaging laterals to keep the units square.....or laterals that are shaped like figure eights....

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Permalink Reply by Mac Davis on April 28, 2010 at 9:43

In theory, a 4620' lateral drains an area 330' to all sides of the lateral. This drains an area 660' by 5280'. This is an area 1/8 of a mile wide and 1 mile long, and 80 acres. This is where the "80 acre" number that gets quoted all the time comes from.

Slice a section into 8 North/South strips, and you have 8 80 acre units that are "efficiently and economically drained" by a single well in each unit.

640 acre sections may be a good thing. If so, we should change the law to make them legal.

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Permalink Reply by J Smith on April 28, 2010 at 10:25

In theory, you are correct. Unfortunately, to have a legal location an operator must be at least 330' from a lease line. So, in reality, drilling in the center (even if it were physically possible to drill the well perfectly straight without deviation) would make the location illegal by half of whatever the width of the hole may be. An 8" wellbore path would be illegal by 4" on both sides in this case. Just saying.

Permalink Reply by Mac Davis on April 28, 2010 at 11:57

J Smith, I think I read somewhere that "normal" deviations from the planned path of the well bore had been determined to be "legal." Plans I've seen show the well bore being 330' from the edge of a unit.

Perhaps the 330' regulation(?) includes a margin for error. After all, the degree to which a well drains part of the formation decreases gradually, instead of going from 100% to 0% right at the 330' line.

However, you do raise a valid point.

Permalink Reply by Henry on April 28, 2010 at 12:23

And what do we do if the geology and structure of the rock shows that better wells will result if the lateral is not running due north-to-south, but 15 degrees off the longitude line? And whatever direction is best in Elm Grove might not be the best in Logansport or Grogan Fields?

Permalink Reply by Mac Davis on April 28, 2010 at 20:11

Henry, the unit orders are based on a proposed well layout to drain the unit. Nothing says the unit boundaries have to be on section lines, and in fact some of the units are not on section lines. A 660'x5280' rectangular unit could be defined on a 15 degree angle crossing section lines. Non HA units have been defined on odd boundaries for many years.

Permalink Reply by Henry on April 28, 2010 at 23:21

Mac,
I agree. But, at some point the rocks might demand the direction of the lateral change. So if you have one unit running 15 degrees off of the longitude line, and then the next unit over better suited at 10 degrees off the longitude line, at some point there will be little parcels of land that are dealt out of the units.

Permalink Reply by Mac Davis on April 30, 2010 at 17:34

Henry, with 640 acre sectional units, if the laterals "want" to be at a 30 degree angle, for instance, then large parts of the unit will not be within reach of any lateral. I wonder if the ideal lateral is already at some angle, but the operating companies go ahead and do either N-S or E-W because that's the only way to maximize draining of the sectional units.

Neither way is "perfect."

Permalink Reply by Henry on April 30, 2010 at 13:33

Steve, I think we are in agreement. As I said, I cannot think of a better way to set up the units, whether it is legal or not. There will never be a way to ensure 100% of the landowners get their "fair" share. There will always be someone who gets screwed. So for now, we will all likely live with 1section = 1 unit.

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