Being Pooled in Wyoming - Good or Bad

I own several small State of Wyoming oil & gas leases in three counties and I would like to know if anyone has any experience with being pooled in Wyoming. I look at being pooled as a good thing and I'd like to know how to better position myself in the state in order to make my chances of being pooled greater.

My investment plan for O/G leases is I actually hope I get pooled. I do not intend on doing any production myself and I am looking for the ORRI. The production costs the operators saddle you with don't bother me either. I look for Wyoming leases within my budget that are being auctioned within the two mile radius of an operating or planned well. Per Wyoming rules, any lease holder within this two mile radius has to be notified by the producer at the center of that 2 mile radius that they are planning on sinking a new well. If I can get within that same circle of an already producing well I also stand a good chance of being pooled.

To me getting inside that magic 2 mile circle gives me a good chance of being bought out, leased, or pooled. Being pooled seems to be in my best interest because I see it as the easiest way to manage my lease and profit at the same time. I also look at it as "they came to me, not me to them" so it gives me more negotiating power and possibly the upper hand. Of course I'm also seeking out a buyers but I like the pooling idea.

Am I going in the right direction with my thinking? Any opinions will be greatly appreciated.


Mr. Wood, I think they may offer you participation if your leased minerals are in the drilling unit and if you decline to pay for your part of the well you would be "saddled" as ypu say with a risk penalty of possibly 300% or more and production costs, and I believe you will receive no money until they are paid off. In your position I would be fairly eager to assign my lease for a reasonable royalty interest. I think the alternative would be to hope for a great well and that you might start realizing something from the probably greatly depleted well in about 5 to 10 years or more. I also think the notice for the 2 mile circle is probably to allow you to drill your own well to offset drainage, I don't think they are inviting you to the party just because they are drilling within one mile of you. Oil is tough business. I do wish you luck, but I wouldn't lease state minerals even at the attractive prices they sometimes go for. I am not an expert on Wyoming oil and gas but I have looked into it for others and this is my opinion of how I think it would work.

"but I wouldn't lease state minerals even at the attractive prices they sometimes go for"

Thank you for your reply Mr. Kennedy. Why would you not lease state minerals and what is the downside compared to BLM or private minerals?

In return to generating an income from the lease, I wouldn't have any problem paying my share of the production costs.

I'm educating myself and I appreciate your advice. I am looking for the best way to market my leases and position myself as best as I can.

Mr. Wood, are you willing to pay for your part of a wildcat well ? I wouldn't be anxious to participate in such a proposition as anything short of a home run may be less than advantageous. I had been following your posts and thought it most likely that you came into posession of some leases at a reasonable cost. I don't think it's bad to have them, but I do know how expensive the drilling can be and even in an extremely good area you can get a poor well and I wouldn't participate in a wildcat well unless you are willing to put up $10,000 an acre or more and take it philosophically if you lose it all or have it tied up in a low producing well for 10 or 20 years. I do not know how much time you have left on these leases but I personally would list them for assignment/sale and if I received no offers I would sit on them and wait for action to come to me. I think the odds are a little long that exploration will happen in any given area in 5 to 10 years if it isn't on the edge of current exploration. That was why I was saying that I wouldn't want to lease state minerals even at the reasonable prices I see them go for at auction. The reason they are reasonable is there isn't a great deal of interest in that area yet. Off topic, I saw your listing of the gold rights, and it got me thinking, if only I were thirty!