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Guide · Mineral owners

Colorado spacing orders and pooling, for mineral owners

If a horizontal well two sections away has started paying you, or a landman has told you your minerals are "in a unit," a spacing order is the reason. It is the single document that decides which tracts share a well's production and in what proportion, and it is public.

What a spacing order does

The Colorado Energy and Carbon Management Commission (formerly COGCC), on an operator's application, establishes a spacing unit: a defined area that one well or a set of wells is allowed to drain. Everyone who owns minerals inside the unit shares in every well drilled in it, in proportion to their acreage, whether the wellbore crosses their tract or not.

How Colorado units are laid out

DJ Basin horizontal wells in Weld County are drilled on 640- to 1,280-acre drilling and spacing units, frequently as multi-well pads that drain several units at once; Piceance gas sits on tight 10- and 20-acre patterns under older orders. Since 2019 the Commission's rules also govern surface setbacks, which changes where a pad — and therefore a unit — can go.

Why your decimal looks the way it does

Your royalty decimal on a unit well is your net mineral acres in the unit ÷ total unit acres × your royalty rate. A 40-acre tract in a 1,280-acre unit at a 3/16 royalty is 40 ÷ 1,280 × 0.1875 = 0.005859. When operators enlarge a unit for longer laterals, the denominator grows and each owner's decimal shrinks — while the number of wells that pay you usually grows too.

Pooling

Inside a unit, owners who have not leased can be pooled by order under C.R.S. § 34-60-116: since Senate Bill 19-181 an operator needs the consent of owners of a substantial share of the minerals in a unit before the Commission will pool the rest, a nonconsenting mineral owner receives a statutory royalty during cost recovery rather than nothing, and the risk penalty was reduced. Colorado pooling is now the most owner-protective in the region. Whether to lease before a pooling hearing or to go unleased is a real decision with real money on both sides; get advice from someone who works in Colorado specifically, because the rules differ state to state.

How to find the orders that touch your tract

Orders are indexed by case or docket number and by the sections they cover. The practical way in is by section: find every order that names your section, township and range, then read the unit boundary and the wells approved in it. Our map shades approved units and lists their wells where the state publishes the geometry; click your section and the units that include it appear with the order reference.

What to watch

Common questions

Do I get paid if the horizontal well doesn't cross my land?

Yes, if your tract is inside the well's spacing unit. Production is shared across the whole unit by acreage, not by where the wellbore runs.

Where can I read the actual Colorado order?

On the ECMC website under the case or docket number. Our map keeps the order reference on each unit so you can go straight to it.

What happens if I ignore a pooling notice?

You are pooled anyway, on the statutory terms rather than terms you negotiated. In Colorado that means since Senate Bill 19-181 an operator needs the consent of owners of a substantial share of the minerals in a unit before the Commission will pool the rest, a nonconsenting mineral owner receives a statutory royalty during cost recovery rather than nothing, and the risk penalty was reduced. Colorado pooling is now the most owner-protective in the region.

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