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.