Perforation PSA Pooled Unit Foxtrot is Tract A under the Big Red One PSA, and Pooled Unit Whiskey is Tract B under the Big Red One PSA. The Army #1 well is drilled under the Big Red One PSA. The as-drilled plat shows 24 perforations from first take point to last take point, with 10 perforations from first take point to boundary line under Tract A and 14 perforations from boundary line to last take point under Tract B. The participation factor will be calculated as follows: • 14 perforations (Tract A) / 24 perforations = 58.333333% participation factor • 10 perforations (Tract B) / 24 perforations = 41.666667% participation factor Penetrated Zone PSA Pooled Unit Foxtrot is Tract A under the Tropic Lightning PSA, and Pooled Unit Whiskey is Tract B under the Tropic Lightning PSA. The Army #1 well is drilled under the Tropic Lightning PSA. The as-drilled plat shows 7,900’ from penetration point to bottom hole location, with 5,250’ from penetration point to boundary line under Tract A and 2,650’ from boundary line to toe under Tract B. The participation factor will be calculated as follows: • 5,250’ (Tract A) / 7,900’ (Total Lateral Length) = 66.455696% participation factor • 2,650’ (Tract A) / 7,900’ (Total Lateral Length) = 33.544304% participation factor
Floating Working Interest Royalty Owners • 1/8 Roy * 100% MI * 2,115’ Tr1 Lateral / 9,883’ Tot Lateral = 0.02675048 (Murphy RI) • 1/5 Roy * 100% MI * 2,640’ Tr2 Lateral / 9,883’ Tot Lateral = 0.05342507 (Johnson RI) • 3/16 Roy * 100% MI * 5,128’ Tr3 Lateral / 9,883’ Tot Lateral = 0.09728827 (Arthur RI) Overriding Royalty Owners • 5% ORR * 100%WI * 2,115’ Tr1 Lateral / 9,883’ Tot Lateral = 0.01070019 (Patton ORRI) Working Interest Owners • 100%WI * 2,115’ Tr1 Lateral / 9,883’ Tot Lateral = 0.21400384 (Powell GWI) • 82.5% NRI * 100%WI * 2,115’ Tr1 Lateral / 9,883’ Tot Lateral = 0.17655317 (Powell NWI) • 100%WI * 2,640’ Tr2 Lateral / 9,883’ Tot Lateral = 0.26712537 (MacArthur GWI) • 80% NRI * 100%WI * 2,640’ Tr2 Lateral / 9,883’ Tot Lateral = 0.21370030 (MacArthur NWI) • 100%WI * 5,128’ Tr3 Lateral / 9,883’ Tot Lateral = 0.51887079 (Moore GWI) • 81.25% NRI * 100%WI * 5,128’ Tr3 Lateral / 9,883’ Tot Lateral = 0.42158252 (Moore NWI) Fixed Working Interest JOA – The contract area contains 640 acres, being 160 acres in the NW/4 of Section 23, 160 acres in the SW/4 of Section 23, and 320 acres in the W/2 of Section 27. Exhibit “A” of the JOA H Moore Exploration 50.0000% Gen Powell Exploration 25.0000% D MacArthur Drilling 25.0000% __________________________________________ Total 100.0000% Royalty Owners • 1/8 Roy * 100% MI * 2,115’ Tr1 Lateral / 9,883’ Tot Lateral = 0.02675048 (Murphy RI) • 1/5 Roy * 100% MI * 2,640’ Tr2 Lateral / 9,883’ Tot Lateral = 0.05342507 (Johnson RI) • 3/16 Roy * 100% MI * 5,128’ Tr3 Lateral / 9,883’ Tot Lateral = 0.09728827 (Arthur RI)
Allocation Examples:
Section 23 – Audie Murphy owns all the mineral interest in the NW/4 (Tract 1), and leases to GS Patton Leasing at a one-eighth (1/8) royalty. GS Patton Leasing assigns all of the working interest to Gen Powell Exploration save and except a five percent (5%) overriding royalty. Henry Johnson owns all the mineral interest in the SW/4 (Tract 2), and leases to D MacArthur Drilling at a one-fifth (1/5) royalty. Section 27 – Bea Arthur owns all the mineral interest in the W/2 (Tract 3), and leases to H Moore Exploration at a three-sixteenths (3/16) royalty. Navy #1 well – The as-drilled plat shows the surface hole location in the NW/4 of Section 23 and the bottom hole location in the SW/4 of Section 27. The lateral measures 9,883’ from first take point to last take point, and the following lateral lengths cover each tract: 2,115’ in Tract 1, 2,640’ in Tract 2, and 5,128’ in Tract 3.
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N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s
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