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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Replies to This Discussion

Permalink Reply by intrepid on March 20, 2013 at 7:57
Isolated incidents can already be addressed under current law or by coming yo an agreement on terms with the mineral owner.

HB 100 language is very bad and could become a stepping stone for worse law in the future.

We should all oppose HB 100!
Permalink Reply by G. Knomes on March 19, 2013 at 10:29

From Intrepid above:

"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"

Your analogy is not realistic nor is it honest.  In most cases, it's the small lot owner that benefits the most. They get a $ share and don't even need to have a well(s) on their lands.  Means also that fewer wells are drilled - sometimes many fewer.  Lower operating costs means longer production life and more revenue for the royalty owner.

1kw6x71km1v37Permalink Reply by 1kw6x71km1v37 on March 19, 2013 at 14:46

I appreciate the fine line you draw, adubu. Of course, minerals are owned separate from the surface in many if not most cases in TX, and the point is the mineral owner does indeed own those minerals, and they cannot be removed by another party without conveyance. Best I recall, TX has punitive damages, and I recall one particular case in the 80's between two rather large O&G companies where the final award for mineral trespass was in the many millions of dollars.

Permalink Reply by intrepid on March 20, 2013 at 8:06
Nobody wants anything 'Forced' onto them and HB100 does that. It does it mainly for the benefit of one company and leaves the mineral owner with no real choice. Your claim is unsupported and I do stand by the statement above.

But the biggest threat is what this bill could open the door to in the future. There was testimony and concern about this being a basis for regulatory confiscation of mineral rights for the benefit of private O&G companies.

Once we allow a company yo set in law what they are allowed to pay mineral owners for their property we have lost a very important private property right.

I can see the Obama regime really loving HB100!
Permalink Reply by Sam W. Latimer, III on June 3, 2013 at 7:03

I own both large and small mineral and royalty holdings in a couple of states. I represent various individuals and trusts, but I also perform land services for "companies". As someone who has sat on both sides of the table, I know that force pooling is necesssary, especilly in Texas. I spent almost 10 years buying leases, royalties and working interest from the Piney Woods to the Panhandle and from the Red River Valley to Rio Grande Valley and have seen first hand just how uneducated these small interest owners can appear. Stupidity is not a virtue. I guess if you ONLY (1) read by candle light, (2) ride a horse or in a wagon, (3) keep your perishable foods in a mountain stream and (4) brush your teeth with sand, I will have to agree with you. By the way, what natural materials make up your PC and how do you transfer data - smoke signals? In the end, I believe that the so called anti-explorationists really are only holding out for more money they believe they deserve for attempting to save their hand full of dirt that actually holds the entire world together!

Permalink Reply by rick linkenhoger on June 3, 2013 at 7:41

I agree Sam. I've got minerals in 3 sections in the Culberson County Bone Spring, Wolfcamp play. At the moment we are being held up by a 5 and 10 acre mineral owners because they are tree hugger anti oil owners. It's not fair that a minority can hold up the majority! I support HB100 and have already called my representatives to urge them to vote YES!

Permalink Reply by adubu on June 3, 2013 at 10:42

FYI------HB 100 is DEAD it was left pending in Committee in March--- so Not a issue for present time---

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