Replies to This Discussion

Permalink Reply by Les Bamburg on July 8, 2010 at 2:49

Mac,

Is the unit formation and forced pooling basically similar for Texas and Louisiana? No

Is everyone in a unit pooled into one group to share production? If you are in the unit, you share in production.

Are hearings held to force pool everyone in a unit? I do not think so as Texas does not utilize the same force pooling approach.

Is there a somewhat standard unit size for Texas? Number of acres are similar for the same field/formation but shape is definitely not.

Do the production companies carve up the map to suit themselves or is there some standard system? Shapes and orientations vary significantly as the operator for each unit gerrymanders leased acreage together.

Do other states tend to use a unitization and force pooling system? Each state has its own system - Louisiana seems to have the best system overall.

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Permalink Reply by Mac Davis on July 8, 2010 at 14:24

Yow! That's ugly, thanks. Louisiana's scheme does seem a lot better. Sometimes we want to berate our local government and don't realize that sometimes they're better than some of the others.

Is there nothing similar to LA forced pooling at all?

If some small minority of mineral interests don't lease or otherwise agree, do they get forced somehow, get their minerals taken without payment, or do they block the well? Do they have to stay some certain distance away from the unleased land?

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Permalink Reply by jffree1 on July 8, 2010 at 15:11

No, unleased interests can't usually block a well unless there are a lot of them. I'm no expert but for, say, an undivided interest owner who holds out... the other owners of that tract have the right to have their minerals produced and TRRC will decide in their (and the operator's) favor the majority of the time.
The operator will get an exception to Statewide Rule 37, which governs spacing (in this case, internal lease line distance to well bore), and proceed with the well. The odd man out can get a hearing on the 37 exception but if he has failed to accept a good faith offer to lease (basically what everyone else accepted) the exception will be granted.

It can get messy... I can even show you plats that have excluded an entire tract (usually small) in the middle of the unit, like a donut hole. But, in most cases, the operator would prefer to have everyone leased, if at all possible, I think. That's just an opinion based on a couple years of observation, for what it's worth.

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Permalink Reply by Les Bamburg on July 8, 2010 at 15:15

Mac, basically unleased land will likely be cut out of the unit. There is a minimum spacing requirement between the perfs and acreage that is not in the unit. There is no force pooling but the minerals are not taken because of the spacing requirement.

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Permalink Reply by jffree1 on July 8, 2010 at 15:21

That is true if the unit can be configured to exclude the tract. If it is smack in the middle of what they are trying to pull together it is a bit trickier than that.

We do have MIPA (Mineral Interest Pooling Act) which is supposed to protect small owners from being excluded or having their minerals confiscated but it has been used by operators in recent years to force pool owners who, for some reason, can't be found or are outright unwilling to participate in the unit.

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Permalink Reply by Les Bamburg on July 8, 2010 at 15:59

Jffree, I believe I have seen a case where the operator just didn't perf a portion of the lateral to avoid unleased property.

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Permalink Reply by jffree1 on July 8, 2010 at 17:25

Probably so. I've seen several that are initially permitted with "NP" zones due to unleased interests. If they get them leased later, while the well is drilling, the NO PERF zones are removed. If not, they get an exception or just don't perf that section.

An example:

It's hard to see but there are little arrows down the bore path labled NP-330' showing the zone.

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Permalink Reply by The_Baron on July 13, 2010 at 3:27

I like the little tract in the middle that was excluded....

Just goes to show you that LA is really ahead of the game when it comes to protecting interests of industry and the mineral owners.

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Permalink Reply by jffree1 on July 13, 2010 at 4:13

Yep, that is one argument for force pooling EVERYONE in the unit.

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Permalink Reply by DJG on July 13, 2010 at 4:07

The most recent plat for this Motley 1-H well now shows that the excluded square in the middle of the unit and that bite out of the lower left side of the unit are now leased:

http://webapps.rrc.state.tx.us/dpimages/r/776684

Interestingly, that excluded square in the middle of the unit was a plot that was owned by the Center Independent School District.

Almost wish that it had stayed unleased as that would have been a VERY interesting case to see how far the O&G would go with respect to pushing for a rule 37 exception versus the fall-out from bad PR due to potentially leaving the local school district out of the unit.

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Permalink Reply by Kat Bloomfield on July 14, 2010 at 10:00

I'm sure you meant to type"Receiver Leases"; perhaps your glasses were dirty

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Permalink Reply by Kat Bloomfield on July 14, 2010 at 10:18

With clean glasses and using the ole "i before e except after c" general rule, thus, "receiver" is spelled r-e-c-e-i-v-e-r, not as you wrote, r-e-c-i-e-v-e-r, the latter of which is not even a word, so why bother writing it.

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