I was wondering the pro’ sand cons of being forced pooled in Montana.
Background information.
22.5 acs of minerals in the family. I own 40 ac of the surface. The spacing unit is 1280 ac. Seems that the 40 ac is “in line” to be drilled on. With drilling comes a host of other things. Flow lines, saltwater lines, oil lines, gas lines, power lines, roads, dust, people. All of which I don’t want.
I could care less about the money to be made on it, I really like this 40 ac.
The mineral owner my father really likes the 40 also.
Will being forced pooled help with surface issues.
I understand the state grants them the right to ingress and egress. Build locations and roads, but what about pipelines and such.
The oil company will not sign a lease that says, “all of location pipeline must be approved by surface owner.”
But if forced pooled wouldn’t end result be the same.
Also I have read the Montana code annotated as far as force pooling. The question I have is. Do they have to pay mineral owner from the first barrel of production or is money withheld until risk penalties are paid.
Roosevelt county Montana, extreme east side.
Mike
Not sure of Montana, but in OK, they make separate agreements with the surface owners for surface damages. Have you tried telling them that you will not allow access without an astronomical amount for damages? Seems like they might be willing to go build a location on someone who is more agreeable if there is 1280 acres available.
I doubt they will move their location off the 40 ac. It is surrounded by blm ground, seems like the blm has a big stick to keep them off but has no problem with collecting of money. The blm is actually great to deal with as everybody has to listen to the blm. I hope you are right and they go elsewhere to drill. Seems they have to many “assets” in the spacing unit to the east. By assets I mean pipelines, road ect, to go start new ones two miles away. This ground isn’t leased, would having a lease with anyone that has the proper stipulations we want be a good route.
I believe that Montana has a 12.5% statutory royalty for those force pooled. I would look up the forced pooling statute, it can be found online.
I agree with Go Fast, the mineral lease should be seperate from surface issues such as roads pad and pipeline, electrical and others. You don't have to grant pipeline if it's not a common commercial carrier. You don't have to grant electrical. I would say that the best way to keep them off is don't lease. Tell them that pipeline and electrical will not be granted under any circumstances. You may be force pooled and possibly they could obtain access to your surface to protect correlative rights, if it were the only place they could drill from but if they are going to have to run a generator for 20 years and truck every single drop of oil and water from your site, it will seriously eat into profits, then when the risk penalty is paid off and you become a working interest for your part of the well, profits take an even greater nosedive. Be vocal and make the disincentive as great as humanly possible, tell the company and not just the landman, the landman may just think you are negotiating and not pass it on.
Leasing to someone else is not going to save you. They would be more interested in profit than protecting you, the fox guarding the henhouse.
That is what I was thinking. Rw. They were trying to use force pooling as a club, I looked into it and it’s like what’s wrong with that. We got 22.5 mineral acres it isn’t going to make or break us either way. Anything else to worry about?
Mikeeee, just keep an eye on things. Nip anything in the bud. If you catch them trespassing with no agreement or order, prosecute.