Replies to This Discussion

Permalink Reply by Grillin' - MmmMmm on November 18, 2008 at 3:31

Good replies/followup questions KB. Always good to see folks on this site helping out others. We argue and fight over lots of things, like politics, but in the end, the real reason for this site is to help folks get answers to their questions!

I'd maybe add to #3 a bit of information for noahh. What may be happening is that the existing well on your property is producing from one reservoir/horizon. But the "forced pool" is going to be in another reservoir/horizon. These oil/gas accumalations are sitting at different depths, kind of like a stack of pancakes (okay, a really gimpy example but work with me!). Each layer can be unitized separately and have separate ownership %'s. Also, some folks have leased certain depthslayers to one company and other depths/layers to other companies. Hoepfully this sheds a little more light. But keep asking if you don't understand. There are so many folks here who know a lot about this that there is no reason for anyone to be left hanging!

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Permalink Reply by The_Baron on November 18, 2008 at 3:56

The lease may still be with the original lessee, but they may have farmed out to another company to drill more wells in existing units or in other depths. Some companies will farm out for a cash price, overide, working interest etc.

Its a away for companies to develop their leaseholds, allow other companies to explore with little or no risk to the lessee.

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Permalink Reply by The_Baron on November 18, 2008 at 4:55

The important factor is if a landowner is already leased, their royalty will be protected as long as they are included in any new units.

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Permalink Reply by noaah on November 18, 2008 at 5:23

Thank you to KB, Mmmarkk, and The Baron for your information! I appreciate your time and analogies - it isn't easy navigating the Haynesville Shale!

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Permalink Reply by Bobi Carr ("parker") on November 18, 2008 at 4:48

Mmmarkk,

I love the pancake analogy. It takes a smart person to come up with a simple answer.

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Permalink Reply by Les Bamburg on November 18, 2008 at 13:13

Noaah, can you provide some additional information. ie What formation, zone or sand is being unitized and force pooled? The bigger question is does your lease agreement cover those formations/depths?

By the way, acreage is "force-pooled" in a unit whether it is leased or not. Being force-pooled into a unit just means your acreage participates even if the well is not drilled on your acreage.

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Permalink Reply by noaah on November 18, 2008 at 15:46

The Haynesville depth is being forced pooled. Our original lease was written several years ago and unfortunately I don't think that it had a depth specification, but I will carefully re-read it. Also, thanks for the added info - it just seemed odd to me that my original lease is with one company and the forced pooling is coming from a different company. Don't they have to let you know if they "sell off" or change your lease? By the way, once it is approved (it appears like that is a given), will they send more info on the details - like term of forced pooling lease? indemnity clauses? royalty details? other "standard" lease items? Again, THANK YOU for your help!!

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Permalink Reply by noaah on November 18, 2008 at 16:08

Again, I appreciate the information. Obviously, I do not fully understand all the ramifications of the forced pooling situation. Unfortunately, it takes an old dog a little longer to catch on - Your knowledge is helping to shed light on this - thank you!

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Permalink Reply by Les Bamburg on November 18, 2008 at 16:41

Noaah, let's assume your lease agreement covers the Haynesville Shale. The lessee will still be required to pay you royalty because he will be a non-operating owner in the unit. For example, if your lease covered 32 acres and the unit was 640 acres, the lessee would pay you royalty on 5% of the unit production (32/640).

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