Creek County pooling


#1

I’ve been pooled in Creek County NW/4 NE/4 OF SECTION 32, TOWNSHIP 19 NORTH, RANGE 7 EAST. 40-acre drilling and spacing units. I own 1 acre. What is the best option for me? What does this mean?

Cash Consideration + Basic 1/8th Royalty. In lieu of participating in the working interest in and the development of the separate Common Sources of Supply in the drilling and spacing unit involved in this cause and the land covered hereby to elect to receive a cash sum of $100.00 per net mineral acre owned by such owner or per net mineral acre covered by an oil and gas lease held by such owner, plus the normal 1/8th royalty (as defined in 52 O.S. §87.1), free and clear of all costs, expenses and risks incurred in or in connection with the drilling, completing, testing, equipping, operating and producing of any such well covered hereby; and therefore any owner electing this option shall deliver under this order a net revenue interest of 87.5% of 8/8ths of the oil, casinghead gas, gas and gas condensate produced from any well covered by this order, with such net revenue interest being determined by deducting from such owner’s share of production all existing royalties, excess or overriding royalties (including the one provided for immediately above) and other non-operating or non-costbearing burdens; and provided further than such revenue interest of 87.5% of 8/8ths shall be proportionately reduced and payable only in the proportion that the number of net mineral acres in the unit covered by the drilling rights or working interest owned by such owner and relinquished under this subparagraph bears to the entire number of mineral acres in such unit; and Special Treatment of Respondents Owning Less Than One (1) Acre: Notwithstanding the terms and conditions of subparagraph 7.2(ii) above, any owner of mineral rights of half an acre or less electing not to participate in the development of the unit as a working interest owner (or being deemed a nonparticipating owner pursuant to paragraph 8 below) shall (in addition to the compensation in subparagraph 7.2(ii) above), be paid a bonus payment of $50.00.Any cash bonus which becomes payable under this order by virtue of any election or constructive election made with regard to the proposed initial unit well involved herein shall be paid or tendered by Applicant, and in connection with any such election or constructive election as to such initial unit well, Applicant shall acquire from the owners herein pooled all force pooled acreage, being the interests, if any, relinquished hereunder by the owners herein pooled who elected or were deemed to have elected not to participate in the working interest in and the development of the separate Common Sources of Supply in the drilling and spacing unit involved herein under the plan of development established in this order. In the event any owner elects or is deemed to have elected to do other than participate in the working interest in and the development of the separate Common Sources of Supply in the drilling and spacing unit involved in this cause, such owner shall be deemed to have relinquished under this order all of such owner’s right, title, interest or claim in and to the separate Common Sources of Supply in the drilling and spacing units involved herein in the landcovered hereby (including the proposed initial unit well and any subsequent well or wells under the plan of development of such units established in this order), except for the normal 1/8th royalty as defined above and any other share in production to which such owner may be entitled by virtue of any election or constructive election hereunder.Failure to Properly Elect. In the event any owner whose drilling rights or working interest is herein pooled shall fail to timely and properly elect in writing under paragraph 7.3 above, as to all or any portion of such owner’s interest in the unit involved herein, such owner as to such interest or the portion thereof not covered by a timely and proper written election shall be deemed to have elected not to 'participate in the working interest in and the development of the separate Common Sources of Supply in the drilling and spacing unit involved in this cause under the plan of development established in this order and shall be deemed to have elected the option contained in subparagraph (ii) of paragraph 7.2 and thereby accept a 1186 royalty and deliver to Applicant a 87.5% net revenue interest proportionately reduced.


#2

You have several options, but you must answer swiftly as you only have 20 calendar days for it to get to them after the order date. You can either participate in the well (which is not a good idea for the novice)or you can select the bonus of $100 and get a 1/8th royalty. You get 12.5% and they get 87.5% of the revenue. They take the risk of drilling the well. You would probably be better off taking the 1/8th as it will give you the $100 for your one acre and you have nothing that you have to pay for the well. If it is successful, you will get royalties. Reply to the Terrain Energy LLC Operator listed on p. 7. Give them you name, address, legal description of your acres and tell them that you pick option 7.(ii) for 1/8th royalty. Send them a W-9 as well so they pay you in a timely manner.


#3

On the W-9 in the section 3…What to I check? The land is owned by me equally with my father, my brother, and two sisters.


#4

Is it owned in a trust or a partnership? If each one owns individually, then each of you need to sign a separate W-9. How you received it makes the difference.


#5

It was deeded over to each one (five people) on a quick claim deed as owned jointly.


#6

Maybe someone with accounting or legal experience can answer that issue properly.