Citizen Energy Pre-Pooling Letter Confuses Client


#1

A client forwarded me a letter from Citizen Energy III for Section 28 & 33 15N 16W. She was understandably confused by it. It seemed to require her to make one of three elections although no pooling order has bee issued. Two of the choices were to “Lease or assign your interest”. A lease is entirely different from an assignment.

Other portions of the letter are confusing.

Redated Citizens Letter.pdf (1.4 MB)

At this point we are not returning the form although we are interested in the possible lease terms. She won’t be picking an item on the letter.


#2

I see these quite often. I have been of the opinion that it is intentionally misleading a party to believe it is a pooling order.

Intentional or not it does often cause confusion. I get quite a few calls on them. Some are in a panic thinking if they don’t respond they will be given the default 1/8 RI.

FYI Citizen recently pooled a couple of sections 2 miles North for $1750 3/16 and $500 1/5.


#3

Just got the same form with three options. Thanks for the info on what they were offering. Sent us 1500 at 1/8 and 1250 for 3/16. In 28 & 33 as well.


#4

I received the same letter from Citizen. Do we just wait until they pool, or see if anyone else is in the game?
If we wait do we automatically receive the lowest offer? Thanks.


#5

Eli, I would simply take that letter as an offer to lease the same as you would a phone call making that offer. Normally, I would not sign anything but an actual lease. BUT, You want to make 100% sure it is not a “Pooling Order”
This is what a pooling order should look like. Be prepared to make an election if you choose to be pooled under a pooling order. You don’t want the default election that they will give you if you do not respond.
http://imaging.occeweb.com/AP/Orders/occ30087327.pdf

I would also suggest confirming your contact information can be found in the county clerk records and indexed to each tract you own. If it was deeded, make sure it comes up on the index and that is still current info. If it was a probate, a copy of the order should show up and indexed to you with the correct address. You want all parties that wish to lease you to be able to find you.