Back on June 23, 2012, the MDW poll asked the question whether a mineral owner would prefer 640-, 1280-, or 2560-acre spacing, or does it even manner with regard to the Bakken boom? I don't remember the results but I seem to recall it was something like 70-30 with the vast majority preferring smaller spacing units.
I am not a mineral owner, so I don't have a dog in that fight, but I was asking the question from the perspective of a 65-year-old male with a desire to see at least one well on "his" land ("his" mineral rights) before he began his Long Rest.
Again, this is just idle chatter. There is no "right" answer.
But this is why I asked.
Now, remember, once there is production in any one well in a spacing unit, there is no urgency to drill another well in terms of losing the lease. If the operator has a producing well, he may or may not be inclined to drill another well any time soon. It is very possible that any mineral owner with just a few mineral acres might be lucky to see one well on his "land." Based on comments, some folks have waited a lifetime for a well on "their land."
In the original post, I included the section and the permit numbers, but I thought that might make it too personal. For that reason, I have removed "identifying data" so as not to bring in the current "owner" of that section.
So, then look at section xx-1xx-9X, in the xxxxx oil field. There is one producing well in that section, #xxxxx, spudded back in 2008 - 2009 time frame on 640-acre spacing. And that's the only well that's been drilled in that section all these years. So, if the original owner had 640 mineral acres in this section, he had at least one well, with royalty checks from one well. And royalty checks which have been decreasing significantly after that first year or so: from 9,000 bbls of oil per month back in April of 2009, to 2,000 bbls of oil per month in October, 2012.
But, then, wait, what's this? Another check, and another check? Sometime between 2009 and 2012, section xx-1xx-9x became part of a 4-section spacing unit. And two more wells, sited in other sections, are providing royalties because they are part of 2560-acre spacing unit. So, now this gentleman who was kinda hoping for just one well before his Long Rest is now bragging about three wells from which he is collecting royalties.
And, not only that, there are seven more permits/wells in that 2560-acre spacing unit that will be drilled in the next six months or so. By the end of 2013, this gentleman can brag about his nine wells. And only two will actually be sited in his section where his farmstead is. All because of that 2560-acre spacing.
Granted, there are other issues like lease bonuses, and percent of each well. But right now, this snapshot in time for this 65-year-old gentleman, he has one producing short-lateral well that was drilled in 2009. If there had been no change in the spacing unit size, it's very possible that's all he would have for the next 'umpteen' years.
Again, with 640-acre spacing, this gentleman has a single producing well, and that's it. With 2560-acre spacing, he will soon be receiving royalties from nine (9) wells. If he's also the surface owner, it's even better: seven of these nine wells will not be on his land. Smile.
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