Replies to This Discussion

Permalink Reply by obed w odom on January 8, 2011 at 18:10

Thanks, Skip. I have an old Globe Map Co. map of T23N R6W and I thought it showed the Union C./Columbia Co. line above Section 4 whereas the plat of the proposed unit seems to show Union Co. extending farther west. I will take another look at my old map when I get home.

Obed

• ▶ Reply

Permalink Reply by North LA on January 9, 2011 at 2:21

Tony,

 

You're talking about page 51 that says "expected production 650bopd"?

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 3:22

tony, I'm not familiar with AR. regs for unit applications.  What gets my attention is not the projected production but the Force Pooling provisions that mandate a $250/acre bonus and a one-fifth royalty with a 15 days decision period.  The 500% risk penalty is also a concern.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 8:46

A risk penalty should relate to the risk involved.  You're right.  And 500% is excessively penal.  I'd be curious if your attorney is aware of prior litigation challenging the Force Pooling statute.  Especially in more recent cases of horizontal well development such as in the Fayetteville Shale Play.

• ▶ Reply

Permalink Reply by Aubrey C. Sanders, Jr. on January 9, 2011 at 11:11

Skip,

 

About 10 years ago a cousin of mine was threatened  with Forced Pooling by Marathon in the Cypress Field in Columbia Co. Ark. She had leased to Marathon, but lease expired shortly

before they planned to spud well in unit. She was elderly and knew little about oil business. She  asked me to help her, as per usual. They sent her an AFE to sign if she wanted to participate.

When she elected not to participate she was told to either renew lease or be penalized 400% so I I just advised her to sign new lease. Then they drilled a dry hole in her unit! As you know the penalty is 100% in La. I believe that anything over 200% is outrageous. Does anyone know if AOGC has to approve amount of penalty?

• ▶ Reply

Permalink Reply by FXEF on January 9, 2011 at 11:19

Aubrey,

 

It is my understanding that Louisiana does not have a risk penalty.

 

• ▶ Reply

Permalink Reply by Spring Branch,mineral owner on January 9, 2011 at 15:33

IMHO, Louisiana has a 300 % risk penalty, but it applies to the Unit well only.  It does not apply to alternate unit wells.  You attorneys/lanmdmen check me out and tell me if I am correct or not.

• ▶ Reply

Permalink Reply by The_Baron on January 10, 2011 at 4:18

It applies to all the alternates as well., As long as the operator proposes them undsder the statute. But the penealty only applies to LEASED mineral interests in either case.

• ▶ Reply

Permalink Reply by Aubrey C. Sanders, Jr. on January 10, 2011 at 8:05

Barron,

 

I know that in La the penalty applies only to leased lands. However, I would like to know if same is true in Arkansas? Do you know? I was told otherwise, but have never read AR stautes.

Permalink Reply by The_Baron on January 10, 2011 at 8:52

In arkansas you can be force integrated. Its not really the same at all.

Permalink Reply by Spring Branch,mineral owner on January 10, 2011 at 9:46

I have had one of the top Oil & Gas Attorneys in the state tell me that it is his opinion that the statute does not alpply to alternate unit wells, and that is the opinion of many oil and gas attorneys throughout the state.  Can you spell litigation!

Permalink Reply by The_Baron on January 10, 2011 at 10:10

(a)(i)  Any owner drilling or intending to drill a unit well, including a substitute unit well, on any drilling unit heretofore or hereafter created by the commissioner, may, by certified mail, return receipt requested, notify all other owners in the unit of the drilling or the intent to drill and give each owner an opportunity to elect to participate in the risk and expense of such well.  Such notice shall contain:

(aa)  An estimate of the cost of drilling, testing, completing, and equipping the unit well;

(bb)  The proposed location of the unit well;

(cc)  The proposed objective depth of the unit well; and

(dd)  All logs, core analysis, production data, and well test data from the unit well which has not been made public.

(ii)  Such election to participate must be exercised by mailing written notice thereof by certified mail, return receipt requested, to the owner drilling or intending to drill the unit well within thirty days after receipt of the initial notice.  Failure to give timely written notice of the election to participate shall be deemed to be an election not to participate.

(iii)  Another initial notice must be sent in order for the provisions of this Subsection to apply if the drilling of the proposed unit well is not commenced in accordance with the initial notice within ninety days after receipt of the initial notice.

(b)(i)  Should a notified owner elect not to participate in the risk and expense of the unit well or should such owner elect to participate in the risk and expense of the unit well and then fail to pay his share of such expenses within sixty days of receipt of detailed invoices, the owner drilling same shall, in addition to any other available legal remedies to enforce collection of such expenses, be entitled to own and recover out of production from such unit well allocable to the tract belonging to the nonparticipating owner such tract's allocated share of the actual reasonable expenditures incurred in drilling, testing, completing, equipping, and operating the unit well, including a charge for supervision, together with a risk charge, which risk charge shall be one hundred percent of such tract's allocated share of the cost of drilling, testing, and completing the unit well.

• ‹ Previous
• 1
• …
• 3
• 4
• 5
• 6
• 7
• …
• 25
• Next ›
• Page