TEXAS ALERT: Mineral Rights threatened by Tx HB 100 -forced pooling will limit your ability to negotiate a good lease.

We must take action NOW to defeat HB 100 in the House Energy Resources Committee on Wednesday 3-13-13.

Please read Up on this bill at http://www.tlma.org/legislative.htm

The Forced Unitization Bill, HB 100, has been set for a hearing at the House Energy Resources Committee this Wednesday, March 13.  This is an extraordinarily bad bill for landowners and mineral interest owners.  It is now time to let committee members know this legislation will take away our property rights and that they should vote NO on the HB 100.   The bill would take away landowner rights when negotiating oil and gas leases in several different ways; the main talking points and email addresses for committee members are below:

FIVE REASONS THAT HB 100 IS BAD FOR LAND AND MINERAL OWNERS:

1.      It only requires 70% approval of the total working interest, not working interest owners, which can eliminate any leverage small landowners may have to protect their interests.  Meaning if 1 person owns large acreage that makes up 70% of the land in the unit, he can agree to pool even though 30 guys who own small lots don't want to.

2.      It allows the Commission to issue a forced pooling order before the operator has ever asked the royalty interest owners for approval.

3.      It leaves no real choice.  If an owner makes the decision to not ratify the forced pooling order, the operator can withhold from the owner’s proceeds up to three times what the owner would have paid if he had ratified.

4.      It gives wide discretion in how proceeds are distributed between landowners, allowing the use of any factors “as are reasonably susceptible of determination” when deciding what a tract’s fair share of the proceeds should be.

5.      The current system of leasing oil and gas mineral interests has withstood the test of time for over 100 years.  Things are working in Texas.   Those who want this bill want to change the law so they can make more money and sacrifice private property rights at the same time.

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Permalink Reply by intrepid on March 16, 2013 at 8:23
HB100 poses a threat to property rights across the board. It was clear from testimony in the House Energy Resources Committee that one major beneficiary of this bill would be CO2 companies and one in particular was pushing it hard. Their main point was that they had problems putting together one unit because of a few mineral owner holdouts. Their solution is to go to the Legislature to get this bill passed so that they can then force those pesky mineral/landowners into their project and at their dictated terms. They even want to go so far as to dictate by law what they feel is "fair" and "enough" for your minerals!

This is absolutely absurd!

But, beyond that, where does this type of thinking stop? So, a business wants a sweet heart deal from the Legislature to compel timber owners to sell at the price the company wants to pay rather than strike a voluntary and negotiated deal with the owner? Pipeline companies, we all know, would probably love to expand their already very lucrative position in dealing with landowners.

Essentially any company who can make an argument that what they are trying to do could be 'made more efficient and cost effective' and would 'benefit the public' through enhanced tax revenues would be able to use this as a stepping stone precedent.

This bill, HB 100, is a very dangerous bill for ALL private property rights. PLEASE CONTACT YOUR STATE REPRESENTATIVE TO OPPOSE HB 100.
Permalink Reply by adubu on March 16, 2013 at 9:29
Intrepid---who's the Co. That's pushing this Bill?
Permalink Reply by intrepid on March 16, 2013 at 11:55
These guys were lobbying heavily for it. They had a high ranking corporate type and one of their head landmen testify.

http://www.denbury.com/Home/default.aspx
Permalink Reply by adubu on March 16, 2013 at 12:36
Intrepid--- makes sense -- CO2 is their primary business -- they want more work -- with all new shale oil fields and drilling new plays then secondary etc recovery placed on back burner --their business declining--Sandridge big CO2 plant in Overthrust project out in West Texas also losing money
Permalink Reply by adubu on March 16, 2013 at 14:25
Intrepid ---DAM Denbury has Van Taylor in their pocket check out HB 1496 also --- Van Taylor spend $1million of his own money to get elected --salary of house rep $7200 per session go figure. Google Van Taylor and relationship with Denbury Resources He ran as Tea Party man but he is Corrupt as politic get it appears
Permalink Reply by intrepid on March 16, 2013 at 20:35
I wouldn't characterize it exactly that way. But anyone can draw their own conclusions from facts they individually confirm. I haven't looked at the angle you are describing.
Permalink Reply by adubu on March 16, 2013 at 13:33
Intrepid---- Is Denbury purchasing these old fields and then becomes the operator of tertiary recovery in the unitized large units. So they need State legislature to help allow the units to be unitized favorable to them. Is this their deal? Heavy Lobbyist PAC. Wonder how much Denbury contribution was to Van Taylor Campaign fund? Denbury first Texas CO2 project Oyster Bayou Field they made comment they need state legislators help to support rules to allow large units for tertiary recover.it's all about money and best bet is to let legislators know if State Mineral Exempt then must not be good for citizen mineral owners. If bill can be amended for state tomOK maybe OK
Permalink Reply by intrepid on March 16, 2013 at 20:37
I don't think this bill would ever be good for Texas citizens individually or for the State of Texas as a whole for the reasons already stated.
Permalink Reply by G. Knomes on March 19, 2013 at 6:07

The NARO/TLMA,etc. postion is flawed - they should be in favor of it.  I am a small mineral tract owner and an Oil & Gas Operator and I can assure you that everyone will benefit from forced pooling of secondary and teriary recovery projects.

It will not affect lease trade terms (bonus, roy, etc), it will lead to fewer wells being drilled and few surface tank, compressor, etc facilities being built and the result will be a much "cleaner" extraction system and higher royalty revenues.  This will benefit the land & mineral owner. 

The only "diminishment" that will occur will be that a few owners that simply do not want to EVER lease - will have to particpate. So the bottom line is that - now - a neighbor (that maybe doesn't need the money) can stop the efficient secondary development of an old field.  This has been a problem in Texas for generations.  

Permalink Reply by adubu on March 19, 2013 at 10:28

G. Knomes--- Can you please explain then Why the State of Texas desires to be Exempt from Force Pooling of their minerals and land under this bill

1kw6x71km1v37Permalink Reply by 1kw6x71km1v37 on March 19, 2013 at 10:36

<So the bottom line is that - now - a neighbor (that maybe doesn't need the money) can stop the efficient secondary development of an old field.  This has been a problem in Texas for generations>>>

It's a problem only because under TX law, the surface owner actually owns the minerals in place. You can't legally take something someone owns if they don't convey it to you. This law is a legal fiction that will not go away in the near future, and the results of it will continue to produce absurd results, like the current bill under discussion. Since it still rolls downhill in Texas, landowners, the more impecunious the better, will receive the brunt of the abuse.

Permalink Reply by adubu on March 19, 2013 at 11:49

cheap shot-- today most minerals have been separated from land for years and in most cases the surface owner DOES NOT OWN THE MINERALS in TEXAS.

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