Forced Pooling in Flower Mound, Texas

Oil and Gas Leasing Help
1

I’ve read articles from several different attorneys and I find their views differ completely on forced pooling and royalties.


My question to the masses, I own 1/3 of an acre in a neighborhood that is 80% leased and a drilling permit just passed the town council this week to drill close by. Most of my street has not signed a lease and we really don't want to afraid this would give way to a drill site directly behind our houses.

Can they force pool us and if so, would we get royalties on our minerals if we do not sign a lease?

I'd love to hear your thoughts or experiences.

Craig
2

Dear Mr. Williams,

The Railroad Commission took the unusual and somewhat controversial action of approving forced pooling in its Findley decision. In Docket No. 09-0252375, Finley Resources applied under the MIPA to form a pooled unit in the Barnett Shale consisting of 96.32 acres, for the drilling of a horizontal well. The proposed unit is in an urbanized area with numerous lots and Finley was evidently unable to get all lot owners to sign leases.

In the subdivision in question on the Findley decision, I have been told that it was mostly lower class and perhaps not of a 100% legal population. Apparently one of the motivating factors in the Findley decision was that the landowners were difficult to locate. The State of Texas in its Natural Resources Code has a provision for Receivership Leases for landowners who cannot be located. When I asked on the Commissions directly about this, she (that is a tip off on who it was) said that nobody brought up the concept of Receivership Leases.

Having said that, I am personally vehemently vocal on property rights. It is my opinion that my mineral rights are MY mineral rights and I should be free to do with them as I wish, which includes not leasing them and worse yet, have some bureaucrat tell me that I have the following choices, etc.

Has anybody ever felt good when someone walks up to you and says, “I represent the Government and I am here to help you”?

As to whether you will get a royalty payment if you are unpooled or unleased, if the wellbore physically passed under your 1/3 acre, you would participate as a co-tenant. Otherwise, you just cannot have your cake and eat it too.

As to the location of a well off your property, you have little input, I fear. Well, unless you can conjure up a spotted owl or two.

The Findley case was a MIPA action through the Railroad Commission. If the subdivision owners want to sue on principle, then you can get as much principle as you can pay for.

The short answer is that there is some precedent. Only one. Never tested in court.

Anybody’s guess is as good as mine.