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who determines the unit

  • 9 Replies
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PaNative

who determines the unit
« on: October 29, 2008, 04:49:57 PM »
This may have been answered already, but I couldn't find exactly what I was looking for.

I have approximately 130 acres.  Can a company drill a deep vertical on my property without including neighboring acreage in a unit?  Does the drilling company determine whether to unitize or does the state determine that during the permit approval process?

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digger23d

Re: who determines the unit
« Reply #1 on: October 29, 2008, 09:27:32 PM »
I believe in PA the company submits the spacing to the state but, the state ultimately decides the size of the unit.

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obtronix

Re: who determines the unit
« Reply #2 on: October 29, 2008, 09:32:25 PM »
States give unit guidelines, gas companies can ask for waivers if their unit doesn't meet the state guidelines, hearing is announced, you and the gas company and the state and geologist experts all get together to approve/disapprove unit.


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PaNative

Re: who determines the unit
« Reply #3 on: October 29, 2008, 09:33:00 PM »
Thanks Digger.

I had a company tell me that they could drill a couple of deep wells on my property without unitizing.  They also said they would do a two year lease (for a very small sign on bonus).  It just seemed curious.....especially from what I've read about unitizing in PA.

Any other factual info would be appreciated.

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PaNative

Re: who determines the unit
« Reply #4 on: October 29, 2008, 09:36:28 PM »
States give unit guidelines, gas companies can ask for waivers if their unit doesn't meet the state guidelines, hearing is announced, you and the gas company and the state and geologist experts all get together to approve/disapprove unit.



So any gas company would not be totally truthful in saying my property was large enough to avoid unitization....correct?

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Kilgour Farms

Re: who determines the unit
« Reply #5 on: October 29, 2008, 11:18:55 PM »
A verticle well only needs on average 40 acres. They need not unitize to drill verticle wells. Also depends on what shale layer they are drilling.

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jj

Re: who determines the unit
« Reply #6 on: October 30, 2008, 08:45:33 AM »
PA,

If you don't want the lease unitized and the company says it doesn't have to happen, just put a "No Unitization" clause in the lease.

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PaNative

Re: who determines the unit
« Reply #7 on: November 01, 2008, 10:23:34 AM »
A verticle well only needs on average 40 acres. They need not unitize to drill verticle wells. Also depends on what shale layer they are drilling.
The whole unitization thing is still confusing to me.  On one hand it sounds like the state mandates unitization and on the other it sounds like the company can decide whether to unitize.  Horizontal....vertical.....300 ft. from property line....@#$#@#$@.
I appreciate all your insights.....but sometimes it makes things even more confusing.  I'll keep reading and learning.
Thanks again!

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Kilgour Farms

Re: who determines the unit
« Reply #8 on: November 01, 2008, 10:48:38 AM »
I don't believe there is a state mandate for unitizing in either NY or PA. The o&g's determine whether they will unitize or not. That being said the o&g's may choose to unitize for example if they drill horizontal. The state gives the final OK as to whether the unitized area is approved.

NY has more control over the unitizing then does PA. Look up the PA Law of Conservation, its on here someplace. It is the supplement to PA's Rule of Capture law. NY has similar laws on conservation.

These conservation laws ensures the efficient developement of the resources available. Its suppose to be to the benefit of society as a whole.

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obtronix

Re: who determines the unit
« Reply #9 on: November 01, 2008, 11:09:11 AM »
States give unit guidelines, gas companies can ask for waivers if their unit doesn't meet the state guidelines, hearing is announced, you and the gas company and the state and geologist experts all get together to approve/disapprove unit.



So any gas company would not be totally truthful in saying my property was large enough to avoid unitization....correct?

No, they would be truthful, your land is large enough to avoid unitization, but that doesn't mean they won't, it all depends on the geology underneath your land.

Maybe an example will help, here is a real unit

http://www.dec.ny.gov/docs/materials_minerals_pdf/cntyline_b1.pdf

this is a 498 acre unit, but that doesn't matter, say it was 50 acres, if none of your neighbors land was inside the unit they would not be included, if 2 acres of their land was inside the unit they would, it all depends on seismic data the oil and gas company gathers where the unit goes and what size and shape it is (as restricted by your state), mother nature didn't arrange the gas underneath your land to correspond to your land boundaries, she puts it where ever she wants :)....