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IV c.  Third Example --  Real life examples of abuse of Rule of Capture

Our third example of the ill effects of not have well spacing and royalty sharing is the worst, and it is a real world example, and not a drawing.

There are operators/lessees out there who really take advantage of the Rule of Capture to legally steal as much gas as they can from all the mineral owners that they can.  And if in doing so they get less gas out with their multitude of un-spaced wells, some do not care.  This latter group does not care because they made their money “on the push”, by persuading unsuspecting or ignorant investors to pay them to drill the wells, where they make their profit.  They made their money drilling the wells and so do not care that the investors will not make back what they should, that mineral owners will get less total royalty, or that more surface owners will be imposed upon, and so on and so on.  Instead, they are on to drilling more un-spaced wells and getting paid to drill them.

The map shown here is a bad, but by no means rare, example of these activities.  This is a real map of proposed wells.  It shows a surface tract this is only 105 acres!  The operator showed this map to the surface owner to show what the operator was planning.  The operator was planning eleven wells to be drilled on a surface owner’s mere 105 acres to two formations (the “Alexander” and the “Gordon”).

Outrageous!  And probably legal!  (Though WV SORO believes that a case of first impression could be taken to the Supreme Court of appeals by a surface owner to stop such outrageous conduct.)