Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on April 19, 2011 at 6:10

If the Force Pooling statute is the same as in LA., it would be an improvement on TX. mineral law as it would prohibit Rule 37 exceptions.  JHH, do you have a source for this post?  Anyone who thinks that a NPRI is a non-producing royalty interest raises a red flag with me.  A NPRI is a non-participating royalty interest.  Definition follows:

 

nonparticipating royalty interest

1.  n.  [Oil and Gas Business]	ID: 11431
Ownership in a share of production, paid to an owner who does not share in the right to explore or develop a lease, or receive bonus or rental payments. It is free of the cost of production, and is deducted from the royalty interest.

Permalink Reply by JHH on April 19, 2011 at 8:08

Yes, the first is the TLMA... Texas Land and Mineral Association.

the second bill is from NARO-Texas

jhh

 

Permalink Reply by adubu on April 19, 2011 at 10:12

Skip---the HB 3586 is bad bill and is being push by some oil & gas operator in the west Texas Permian oil basin fields where new tech recovery of old wells are occurring and they want to force pool your unleased  minerals that have no production and have not been drilled into a old large unitized field that is mostly depleted except for secondary and tertiary stimulation that would severely harm you by losing ability to lease at great Bonus plus 25% royalty in smaller normal drilling unit of 40-640 a. that is good prospect today to drill with newer H and Frac knowledge.     This is VERY BAD BILL.

Permalink Reply by Skip Peel - Mineral Consultant on April 19, 2011 at 10:27

Thanks, adubu.  IMO, the best way to discuss legislation is to excerpt the language in a bill that a member wishes to highlight and comment upon and then give their opinions.  We're getting closer with your specifics.  I'm also suspicious of both NARO-Texas and TLMA as their past agendas haven't been totally in sync with the best interest of the average mineral owner.  They are special interest lobby organizations and as such we shouldn't buy what they are selling without performing some due diligence.  Force pooling doesn't have anything to do with forcing an onerous lease on mineral owners.  It has to do with sharing in the production of wells which would be drilled anyway and not leaving any owner out.  That owner will participate as a lessor or as an unleased mineral interest as they may choose.  That beats the heck out of a Rule 37 exception and being cut out completely.

Permalink Reply by adubu on April 19, 2011 at 10:55

Skip--- understand your concerns about NARO but lately I think they are coming around to help the small average royalty owner unless I've been totally "snowed" The problem with this bill is in the plans in the  Permian Basin area to put virgin minerals into large unitized old depleted field. Being Unleased MO in new unit in some cases that are normal unit maybe OK. I agree you don't want to be cut out completely but I think it depends on where your minerals are located and what has occurred in that area. Thank god there is not just one Oil & Gas Exploration Co. like a unitized Nationalized ObamaO&G and we have competition of companies to lease our minerals to

Permalink Reply by Skip Peel - Mineral Consultant on April 19, 2011 at 11:07

Understood. As there are two proposed bills being discussed, I think it would be a good idea to be specific.  Therefore my comments as to the legislation apply to "HB 3586, the FORCED UNITIZATION Bill".  This is the one that laymen tend to misunderstand and have an aversion to regarding the term, forced. 

IMO, as to NARO, they are in it for the money and the national organization gets a cut of the memberships generated by state chapters.  Some chapters may have been formed by persons and/or organizations that have the best interest of mineral and surface owners at heart.  Some are formed by industry members and related businesses that do not.  The national organization really doesn't care that much as long as they get an income stream.  IMO, TLMA is mineral owner driven but only from the prospective of large land owners.  It was not formed to serve the owners of small mineral interests.

Permalink Reply by adubu on April 19, 2011 at 11:29

Skip---Thanks for input and comments---- I'm no expert just read the bill and my post was simply MO after reading plus what NARO told me about the Permian Basin activity.  So all who maybe  interested will need to read the bill themself it's about 41 pages long. Any one interested can go to Texas Legislation Online and read it. It's actually entitled a bill related to CO2 storage and Unitilization. Skip if you have the time I would love to read what you think--Thanks again

Permalink Reply by Skip Peel - Mineral Consultant on April 19, 2011 at 11:37

Adubu, I'll have to leave this one to the Texas members.  I have an appointment with some turkeys in the Ouachita Mountains of Arkansas.  As slow as I'm getting it may take me a whole day to go up that mountain and another to climb down.  And the weatherman says I may have to do it in a thunderstorm.  LOL!  I'll look forward to reading the thread when I get back or late at night on the dial up if I get rained out.

Permalink Reply by adubu on April 19, 2011 at 12:52

Skip--I would be happy to accept the thunderstorm here is East Texas to get it off your plate for the days you are visiting with the turkeys in Arkanasas. I hear you about getting slow for my old 70+ year old bod is slow moving. Have nice trip

Permalink Reply by Skip Peel - Mineral Consultant on April 19, 2011 at 12:57

Thanks.  I will be happy to send the Ouachita Mountain thunderstorms to E. TX.,  or anywhere else that GHS members may need. It appears there may be plenty to go around the next five days and some may not be so welcome no matter how dry it may be.  Watch out for heavy weather and take shelter if it heads your way.

Permalink Reply by jffree1 on April 19, 2011 at 8:02

I posted a link to the full text of HB 2087 yesterday.  If you read it I think you would agree that the problem with it is not so much that NPRIs would be force pooled but that they (whoever is beind this bill) have devised some formula for paying the NPRI royalties based on the length of the borehole crossing the NPRI tract, rather than the mineral acres owned and included in the unit, and that if the NPRI doesn't accept that it is up to him to convince the Railroad Commission otherwise.  It still stinks but people should stop screeching about force pooling and READ THE BILL.  Force pooling is not the big problem with this bill.

 

 

Permalink Reply by jffree1 on April 19, 2011 at 12:48

Here are both bills.

Attachments:

• HB02087I.pdf, 40 KB
• HB03586I.pdf, 134 KB

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