Well Density And How It Might Affect Mineral Rights Owners; Case Study, Slawson Case 22272, Order 24606

Disclaimer: these kinds of posts lend themselves to a lot of errors on my part. Read with caution. I recommend that you refer to the source document, Case 22272, Order 24606. 

Yesterday, I received a note from a reader talking about the "huge" Slawson case. He/she owns a few mineral acres in two non-adjacent sections in Big Bend oil field, affected by this case. When we ran through the numbers we both agreed this amounted to 28 drilling locations for one individual who happened to own mineral acres in two non-adjacent sections in this field.

I remarked many years ago, and have repeated it often, that anyone who receives royalties from one well in the Bakken will eventually receive royalties from 12 wells in the best Bakken, 8 wells in the better Bakken and 4 wells almost everywhere in the Bakken.

I don't want to risk the reader's anonymity from yesterday, so instead of posting the two sections we looked at yesterday, here is what it looks like for a mineral owner who might happen to have acres in two non-adjacent sections in Big Bend oil field, specifically:

• 26-151-92
• 36-151-92

They sit "kitty-corner" from each other which is a very possible scenario for a farmer in that area.

So, here are the results from the case with reference to those to sections. The format is: first line is the number of the paragraph in the NDIC order; the second line is the section or sections involved; the third line is the spacing unit size; the fourth line is the Zone number; the fifth line is the number of wells authorized in this order; and, if necessary a sixth line that would show total wells. I do not understand how "overlapping" works (I think I know, but not well enough to post), and I did this quickly, so there may be errors. The purpose is not to be absolutely correct. It is to give newbies an understanding of just how staggering the Bakken is going to be for some mineral owners. It is very possible for a mineral owner who now receives royalties from two wells, one each in two non-adjacent sections, could eventually be receiving royalties from as many as 40 wells or more, based on this single NDIC order:

Paragraph 97
sections 36 and 26
1280-acre
Zone XIV
6 wells each
12 wells (because the two sections will be in separate drilling spacing units)

Paragraph 137
section 36
1280-acre
Zone XXI
10 wells

Paragraph 163
section 36
1600-acre
Zone XXVI
10 wells

Paragraph 178
section 26 and 36
2560-acre
Zone XXIX
1 well

Paragraph 188
section 26
2560-acre
Zone XXXI
2 wells

Paragraph 193
section 26
3200-acre
Zone XXXII
2 wells

Paragraph 199
section 36
3200-acre
Zone XXXIIII
11 wells

So: 11 + 2 + 2 + 1 + 10 + 10 +12 = 48 wells