Force Pooling in Oklahoma

Law & Legal
1

I have come across an interesting situation in Dewey County, Oklahoma, in which a well drilled in 1971 has been producing from the Oswego formation continuously until the present time. I've simplified the ownership somewhat so the question is easier to explain.

In 1971 all depths were leased as to 540 acres, and Five depths, including the Oswego, were force pooled as to the other 100 acres, constituting the 640 acre unit. All force pooled depths were then earned and owned by "Company A" by the well drilled in 1971. No other wells are located in the section.

In 2004, a new operator, "Company B", was granted a force pooling as to the same four formations pooled in 1971 (the Oswego, the fifth formation, was not included presumably since it was producing already). Many other formations were also included in the new pooling, 540 acres of which were held under lease to "Company A", 100 acres were open minerals owned by those that were force pooled in the five formations by the first order. Company “B” then also leased several owners who were also force pooled. "Company A", along with all the mineral owners who were force pooled by the first order, were all respondents to this new pooling. A well was subsequently drilled in 2004 within the required time-frame, deep enough to have earned all force pooled depths, but it was a dry hole. No further wells were drilled.

My questions:

Who owns the four formations that were part of the initial pooling from 1971? Do these four formations revert to the original owner "Company "A" or is the unit permanently transferred to "Company B" even though the well drilled was a dry hole? (My belief is that the second pooling, by Company "B" holds jurisdiction over these rights)

Who owns the other additional formations (the secondary formations) drilled on the new force pooling in 2004? (My thinking is that these depths will also now be held by the second pooling and owned by Company "B")

Do the open minerals remain held as to the secondary formations named in the 2004 pooling, even though the only well ever drilled to them was a dry hole? (My thinking is that these minerals leases will be released and available, and force pooled interests will be released as to the depths of the second pooling, but not the first)

Any help?

Thanks, Chris

2

Without reading copies of the various documents, I cannot definitively answer your question. However, ownership as to certain formations is initially dependent on the lease, rather than the pooling. The leases signed in 2004 with Company B are likely no longer valid. Also, the 100 acres of minerals that were open in 2004 are also likely now open, and a Company C can lease them - just like Company B was able to lease them in 2004 after the 1971 pooling. Friend me if you want to discuss further.

3

My opinion, without looking at the docs, is that the second pooling was probably held because there was no subsequent operations clause in the first pooling. But that doesn't jive with the naming of the same parties in the second pooling. Its also possible that company B named all the owners because they had no idea who had elected to participate, or who was deemed to have been pooled. Just speculating.

But, if the first well is still producing, Company A owns all the interest in the five pooled common sources of supply, in my humble opinion.

The other formations named in the 2004 pooling are unleased or untouched. Poolings are thought of as 180-day oil and gas leases, and if production wasn't established, then the lease, i.e,. the pooling vaporizes or terminates.

The 2004 leases should be expired, either because there was no need for them to lease or there was no production to extend them beyond the primary term.

4

Thanks for the response. I don't really need to discuss this further, but I'll friend you anyway for future discussions.

5

Thanks for the response. I don't really need to discuss this further, but I'll friend you anyway for future discussions.