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Permalink Reply by Rick Cash on August 21, 2008 at 11:19

There is an application in the works to convert the area where I am to a 320 acre drilling unit. When I learned of this, I was first against it. I got the details and now I am for it. This means that each well drilled will provide me with twice the royalties per well as those drilled in 640 acre units. Since the Haynesville Shale wells will eventually be on 80 acre spacings, there will be no difference in my total monthly royalties when everything is drilled and placed on production. Just that the royalty amounts will grow twice as quickly with each well drilled and produced.

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Permalink Reply by Grillin' - MmmMmm on August 22, 2008 at 3:09

The current 640 units are drilled to hold maximum acreage. They will drill on 640's to be able to get as much acreage in HBP status and take those leases out of their expiration risk category. Then they will go back and infill down to at least 8 wells per section. They may find after several years that they can go down even further, maybe 40 acre spacing but they'll need to look at long term production results. Some companies (EOG) have been playing around with spacing for over 2 years in the Barnett trying to get it right.

But the first wave of wells will be designed to get all of your leases in production units so they don't have to worry about the lease expiring in 3-5 years.

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