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Permalink Reply by Keith Mauck (Site Publisher) on July 14, 2014 at 3:07

Blog has been updated with Part 2

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Permalink Reply by Dino Roberts on July 19, 2014 at 5:36

very, very good and thanks for doing this;

side notes: Force Pooling lowers royalty rates and bonus rates; 1/8 is still a part of almost every Oklahoma pooling election as an option for instance; landmen have it easier in states with force pooling, as they do not have do work title as hard and lease everyone; the operators in Texas do not have force pooling per se and have to pretty much lease everyone, small and large; thus in many cases the land work in States with no pooling is harder because they cannot just lease the easy ones and Pool the rest; I have worked in 8 States over the last 30 years and know first hand; in States with Force Pooling the Operators use the power of the State, to do their title work via Force Pooling in some cases;

MIneral Sales: seems like the mineral/royalty buying companies, have grown over the last 10-20 years, with some having hundred of millions of dollars in their budget and New York big dog money;  buying, regardless of the play or payout or size; building vast mineral portfolios for the next 50 years and not that concerned with payoff the next 4-5 years; "crazy money" with no other place to put it;

thanks for all you do for the site !

Dino

 

 

 

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Permalink Reply by Skip Peel - Mineral Consultant on July 19, 2014 at 5:58

Dino, you're welcome.  LA mineral law includes force pooling under Compulsory Unitization statutes. The manner in which the un-leased, force pooled mineral  interest is treated is the important difference between LA and the other states you mention.  No risk penalty is assessed. 

A note of caution for those LA mineral owners who would consider going non-consent.  If a well does not produce sufficient revenue to cover its cost to drill and complete (payout) the unleased mineral interests receive no payment.  It is a common occurence in the Haynesville Shale Play for exprnsive wells drilled in the first 3 to 4 years to not reach payout until largely deplete.  Some will never payout.  The leased mineral interests in those unit wells received royalty from the first mcf produced. 

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Permalink Reply by Andrew on July 19, 2014 at 14:17

In Louisiana the force pooling laws have the effect of raising bonus and royalty rates.

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Permalink Reply by Skip Peel - Mineral Consultant on July 20, 2014 at 2:52

They provide a LA mineral owner the opportunity to negotiate terms that may be important to their particular situation.  In addition to bonus and royalty for many surface use is a concern.  A no surface use lease clause may provide peace of mind.  Some land owners may welcome certain surface uses that can provide improvements to the use and value of their land.  An access road, correctly located, or a pond converted to the land owner's use after drilling operations are a couple of examples.  

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