If you signed a lease a decade ago and have been wondering if you could get any more value out of your minerals, this is for you.
A lot of landowners assume that once a well is drilled, that’s the end of the story. But across Eastern Ohio, and especially in Carroll County, we’re seeing a second wave of development, and it’s changing the game for people who thought the value of their royalties was already determined.
Let’s talk about downspacing, and what it means for you.
What is Downspacing?
Downspacing is when an operator drills additional wells inside an existing unit that’s already producing. It’s not about expanding to new areas. It’s about going back into old units and squeezing out more value, sometimes double or triple the original volume.
Here’s an example: in Carroll County, where the play kicked off more than a decade ago, EOG recently went back into a unit that was drilled in 2012. That well’s existence meant that the leases were all held by production, and nothing happened for years. But soon, they plan to drill two new laterals in that same unit. That’s downspacing.
And it’s a big deal. Especially for landowners.
The Return of Carroll County
For a while, Carroll County looked like it might be past its prime. Operators shifted, chasing newer acreage in Jefferson and Belmont counties. But with new technology: longer laterals, tighter spacing, better completions; and most importantly, the emergence of the condensate window in western Carroll Co, we’re seeing activity return to these established and producing units.
Why? Because today’s wells are better than those first-generation producers. Technology has evolved, and so have the economics.
If you’ve got minerals in places like Rose Township or Brown Township, this is the moment to pay attention.
What Happens If You’re Already Under Lease?
This is where a lot of landowners get tripped up. If your land was leased years ago and has one well on it, that lease may still be active, even if you haven’t seen much income.
That’s called Held by Production (HBP). It means the operator doesn’t need your permission to drill more wells. Your lease is still in effect, and they can keep producing, whether or not it’s profitable for you.
Now, if they do drill more wells, yes, your royalty checks will likely go up. But remember: those old lease terms still apply. You may be locked into a less favorable royalty rate, or language that allows for post-production deductions.
This is where Gateway comes in. We’ve had a front row seat to these trends for over a decade, and we’re one of the only buyers actively tracking every rig, every unit, and every new lateral across the play.
Even if you’re not looking to sell, we can help you make sense of your lease and your options. If downspacing is happening near you, or on your land, we can show you what that might mean in terms of value.
Bottom Line
This return to Carroll County and other legacy areas is just getting started. We’re seeing more permits, more pads, and more second-generation wells every quarter.
If your minerals are held by production, now is a good time to ask questions:
- Are there new permits in your area?
- Could your unit be a candidate for downspacing?
- How can you get the maximum value out of your mineral as soon as possible?
At Gateway, we’re not here to push a deal, we’re here to help you make an informed decision. Sometimes the best move is to hold. Sometimes it’s smart to take money off the table.
Either way, it helps to have someone who knows what’s really going on.
Want to know what’s happening with your minerals?
Give us a call at (330) 205-5038 or visit gatewayroyaltyllc.com to learn more.
More About Gateway Royalty
Are you looking to sell mineral rights in Ohio? Gateway Royalty is the largest mineral buyer in Ohio.
With convenient offices in Carrollton, OH and St. Clairsville, OH; no one is better positioned to answer landowners questions, make timely and competitive offers, and close quickly with prompt payment.
