Forest Oil is very active in this area. They have just completed an oil well on my property 1 mile north of Nixon. Haven’t got potential report yet but was estimated at 800 bbl/day when drilling began. Problem is with pooling of interest in 600 acre tracts. I only have 75 acres so my pro rata share will be fractional.
Don’t feel too bad. Zaza is drilling on my neighbors land and they are drilling within a hundred feet of our land and we don’t get anything.
I thought Texas Railroad commission required pooling an adjacent tract if wellbore was within 300 feet of closest property line?? If not what protects you from drainhole taking reserves from under your land??
Bill Seger said:
Don't feel too bad. Zaza is drilling on my neighbors land and they are drilling within a hundred feet of our land and we don't get anything.
My interest is an NPRI interest and case law seems to favor me not to ratify lease. So I sign a "Ratification of Pooling or Unitization" on a well by well basis with a savings or antipooling clause.
I recommend using an O & G attorney if you are unfamiliar with O & G agreements. I was in O&G management for 20 years and am now retired, and I have a reasonable understanding of the case law but I am not an attorney. I am very familiar with the TRRC website online services and can "drill down" to find the most recent filings concerning the well on my land.
Surface penetration is on my land so I can do this. If you are an NPRI and the wellbore does not penetrate your tract you may want to ratify the lease agreement. Seek legal advice. However the legal advice I receive says as an NPRI only sign a ratification of pooling on a well by well basis. There is always the possibility that surface penetration and the wellbore may intersect a production zone all on your land, which would mean you don't have to pool and of course will receive a much higher revenue stream. As an NPRI you do not have to sign any agreement until the well is completed, and you can call the Leasee, but the operating company must file a "completion Report" with the TRRC but that may not be posted until after the time to adjust the pooled unit tracts. so If you have a "savings clause" for ratification of pooling for a particular well requiring that revenues only be shared with tracts penetrated by the well bore, it is likely you will come out ahead.
A properly constructed Lease will give the Leasee the right to change the pooling tracts within 60 days of well completion, which gives the opportunity to change the pooled tracts.
Dear Mr. Corder,
You may be correct, but you may not be.
Let us take the situation of a well bore being 300 feet off the lease line. An administrative Rule 37 will be given if the wellbore off the unleased lands are buffered out. The Railroad Commission does not stipulate pooling at all. In the Barnett shale, the RRC authorized the use of MIPA (4 times) in the case of urban drilling, but that is it.
Now let us take a case of the well bore being fracked 467' off your lease line. You had a nice producing well. The frac damages your well. You have no cause for action.
As to drilling through a tract, likewise that tract can be buffered out as well. You have NO recourse if you are a NPRI owner. You cannot even drill your own well to protect yourself, since your NPRI is a non-possessory interest.
Let us say that your NPRI is so large in such a large tract that if you do not consent to pooling, the operator cancels the operation as being non-economic. Nobody wins. Especially you, since you did not even get any bonus money.
As to pooling on a wellbore by wellbore basis. A valid option. One which the operator MAY offer to you. They are under no obligation to offer you an opportunity to pool. More and more pooling transactions are deliberately written so that an offer to pool is expressly denied.
Get a lawyer who knows his stuff and find out the real options and ramifications from a do it yourself approach to oil and gas strategy.
jay Corder said:My interest is an NPRI interest and case law seems to favor me not to ratify lease. So I sign a "Ratification of Pooling or Unitization" on a well by well basis with a savings or antipooling clause.
I recommend using an O & G attorney if you are unfamiliar with O & G agreements. I was in O&G management for 20 years and am now retired, and I have a reasonable understanding of the case law but I am not an attorney. I am very familiar with the TRRC website online services and can "drill down" to find the most recent filings concerning the well on my land.
Surface penetration is on my land so I can do this. If you are an NPRI and the wellbore does not penetrate your tract you may want to ratify the lease agreement. Seek legal advice. However the legal advice I receive says as an NPRI only sign a ratification of pooling on a well by well basis. There is always the possibility that surface penetration and the wellbore may intersect a production zone all on your land, which would mean you don't have to pool and of course will receive a much higher revenue stream. As an NPRI you do not have to sign any agreement until the well is completed, and you can call the Leasee, but the operating company must file a "completion Report" with the TRRC but that may not be posted until after the time to adjust the pooled unit tracts. so If you have a "savings clause" for ratification of pooling for a particular well requiring that revenues only be shared with tracts penetrated by the well bore, it is likely you will come out ahead.
A properly constructed Lease will give the Leasee the right to change the pooling tracts within 60 days of well completion, which gives the opportunity to change the pooled tracts.
Bill. Where is the land you are mentioning? I know Zaza just mobilized a rig NW of Yoakum, DeWitt County.
Bill Seger said:
Don't feel too bad. Zaza is drilling on my neighbors land and they are drilling within a hundred feet of our land and we don't get anything.
From what I can tell, it appears that Forest Oil has pulled out of the immediate Nixon area for now. I know they had two rigs running (a 1000 hp and 1500 hp) in the area around Nixon and SE of Nixon down in Weber ranch country. I am not sure where they went with those rigs. I know they have alot of country leased around the Nixon and Smiley area. I hope your well comes or came in strong!! Our land is South of Smiley out 108. The nearest drilling is still a few miles just South of us. I believe most of the country around us is either leased to Forest or EOG.