Fair Market Value in a Pooled Section

I understand that, if a Pooling Order is approved, a judge will set a fair market value for mineral rights within the pooled section. Does this fair market value apply to all parcels and owners in the pool, regardless of the number of net mineral acres owned?


In reality, the pooling hearing officer, with input from the Pooling Applicant, comes up with a few guidelines for leasing and one for participation in the well. Those leasing and participation guidelines show up as options to the respondents in the Polling Order. Official option election time is short so be ready to notify the applicant about your choice shortly upon receiving an order. If you have leased, you have already taken you option.

In terms of a FMV for selling purposes, the Pooling order is far from doing that. FMV as defined by a number of governmental agencies is the "the range of prices that an educated seller and industry knowledgeable buyer may agree upon for a trade when neither party is under duress."

If you are the selling party, there are a few members of the Forum who can advance your education about your specific mineral rights. Holding an auction with land purchasing agents will rarely result in FMV trades. The same is true of the trade terms. If you value your mineral rights for your lifestyle to be in excess of $50K, it is probably a good idea to hire some professional and legal help in making a trade.

Since all deposits, owners, and buyers are different, using averages to determine FMV will result in somebody getting the raw end of the deal. You can guess who that might be.

Gary L Hutchinson