Replies to This Discussion

Permalink Reply by john goodday on April 20, 2010 at 1:28

Very good news from the Arkansas Supreme Court. Would that spell the end of Selrahc?

Hopefully, we can now move forward and try to limit the size of the "Participation Units" in the Ozark Highlands Unit.

Permalink Reply by Stan Grimm on April 20, 2010 at 11:50

I think this puts another nail in the coffin for anyone trying to claim ownership of mineral rights from old tax deeds. The court in effect said the prior decisions stand and the "new" law about maintaining tax records does not relate back to the tax records of the 1970's and deeds issued at that time. So hopefully people with such claims will reconsder whether it is worth the cost to litigate them.

Permalink Reply by john goodday on April 22, 2010 at 9:51

Mr. Grimm,

What does the mandate to the trial court dated April 15, have to say?

Permalink Reply by Stan Grimm on April 22, 2010 at 10:13

I have not seen it. Usually they just say something to the effect that the attached opinion is final. That authorizes the trial court to go forward with any other necessary orders. For example, the trial judge will now be able to enter a judgment quieting title for specifically described land as against Selhrahc and the other plaintiffs. Royalities that Seeco has been paying to the court instead of to the owners can now be distributed.

Permalink Reply by john goodday on April 23, 2010 at 11:52

Now that the Selhrahc lawsuit is over - look for Seeco to gather steam in the Ozark Highlands Unit. Hopefully, they will form small "Participation Areas" - no more than 5 or 6 section units. Otherwise, you will be sharing the best production with other less productive areas (Johnson & Pope Counties)

Permalink Reply by Stan Grimm on April 24, 2010 at 5:11

I agree that getting this lawsuit behind us will help clear the air for the Ozark Highlands unit to go forward in especially Van Buren County. Other counties were not affected by the lawsuit, but this decision once again affirms that Seeco and others can disregard title claims based on old tax deeds.

As I understand from talks with Ozark Highlands Unit people, the participation areas will be as you indicated, i.e. maybe 5-6 sections, or slightly more. A well will be drilled in one section and the drilling may take it into adjoining sections, but the partipcation area will be only those adjoining sections into which the drilling occurs. Certainly, it can go from section to section, and it is feasible that one of our holdings might go into Pope County. But thankfully, only one. With the others, they will stay either in Van Buren County or dip down into Conway County.

Permalink Reply by john goodday on April 27, 2010 at 7:22

Mr. Grimm,

If a mineral interest is under lease to Seeco, but not committed to the Ozark Highland Unit - what are the ramifications? I realize that Seeco can ask the AOGC to integrate the mineral interest - but the question remains- Would a mineral owner be better off committed to the OHU or not?

Thanks

Permalink Reply by Stan Grimm on April 28, 2010 at 9:49

Excellent question. We have not signed particpation agreements with Seeco, but remain open to that idea. We knew we could not do anything while this litigation was pending and Seeco realized this too and that is one of the reasons we held off.

We have spoken with Seeco people and told them that we are willing to cooperate if and when they become interested in doing something on or near our land. Frankly I wish I knew the answer to your question and if you or anyone else has a list of pros and cons to the question, I would like to see it.

Permalink Reply by john goodday on April 28, 2010 at 14:24

The AOGC can integrate (force pool) the various sections if Seeco makes this request. At that time, the AOGC will determine how large (number of sections) a Participation Unit will consist of. These integration proceedings / hearings take place once a month before the AOGC, consisting of 9 commission members, appointed by the state. Seeco will present their plan on that day and should this proposal go unchallenged, it will become adopted by the AOGC. Prior to the hearing, Seeco will have to notify the parties 30 or 45 days, detailing their plans and giving the various options to those parties who have not joined Seeco's OHU.

One fear would be that they would create very large Participation Units and you would have to share the revenue stream with 20 or 30 other sections & your decimal interest would be .0000000___.

Seems as though a mineral owner could demonstrate that there is not majority approval / consensus / agreement amongst the Mineral Owners within the isolated sections that you are in - the AOGC would have to consider this opposition.

In spite of the fact that these isolated sections may lie within the midst of the National Forest, the question remains - Why would the AOGC force pool these isolated sections into the OHU which was designed to affect sections where the BLM owned the majority of the sections, if the majority of the mineral owners within these isolated sections were not in agreement with the plan.

Ultimately, one would want to encourage a Participation Area plan of perhaps 5 or 6 sections, where Seeco could drill long laterals.

Permalink Reply by Stan Grimm on April 30, 2010 at 2:12

Thanks for the detailed response. I may be naive, but I think Seeco will try and work with the owners and come up with reasonable participation units rather than try and force something through AOGC. That would be a win-win for everyone.

I agee that we will want to encourage participation units of 5-6 sections. A lot of this depends on where the pad is located, i.e in the middle of a section or on the edge of one. If in the middle, probably smaller units; if on an edge, larger units may be required because of the long laterals that may cross, at an angle, different sections.

Permalink Reply by john goodday on May 5, 2010 at 8:20

Order #577-2009-08 - I'm sure that you have a copy of this Order pertaining to the Ozark Highland Unit.

Hopefully, small "Participation Areas" will be part of Seeco's plans. Alternatively, we need to be prepared for integration proceedings, as discussed within the Order.