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June 30, 2009

Royalty owners oppose unitization

OKLAHOMA CITY (AP) — Oklahoma royalty owners are expressing opposition to a proposal that would allow oil and gas producers to drill longer horizontal wells.



At least 200 people appeared before the Oklahoma Corporation Commission Tuesday to get details of the so-called unitization plan and express their ideas.



Supporters say new technology allows producers to drill horizontal wells about two miles long. But regulatory restrictions that require producers to drill only within 640-acre units prohibit wells that long.



The plan would double the size of drilling units to 1,280 acres. Producers say that would allow for longer horizontal wells and make drilling operations more economical and productive.



But royalty owners were skeptical and said longer wells will create bigger pools of mineral owners and further complicate royalty payments.

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