Mary, and other readers, please understand this information is not to be construed as legal advice:
Bottom line, a RO does NOT have to waive her/his/its case law right to be paid on a marketable product and WITHOUT any PPC’s.
1 Mittelstaedt v Santa Fe, 1998, OK supreme Crt, further confirming that OK is a marketable product jurisdiction, the Operator has to make the product marketable (unless RO waives this case law right, see discussion below) with no PPC’s being charged back to the RO. Mittelstaedt was acknowledged in the Pummill V Hancock, 2018, OK Civil Appeals, with further discussion as to when the raw gas (gas at the mouth of the well, value set at $2 per mcf, estimated) becomes marketable (value set at $3 per mcf, at the tailgate of the existing processing plant) further clarifying how and when the enhancement issue comes into play. The Mittelstaedt case sets forth what must be shown if the product is “enhanced”. Bottom line, does the RO want to be paid $2 / MCF OR $3/ MCF for her/his/it’s gas???
Anyone/entity can represent themselves in any Court including the Court system within the OCC. And yes “you can file a protest under your own name”. Caveat emptor, the procedure can be lengthy and beware of the pleadings, filings, Court hearings and followup.
52 OS 87 and PPC’s. The statute requires you to look at the “oil and gas lease”. It’s saying the same thing that I’m referring to.
Remember, All terms in the OGL are negotiable. In the largest majority of OGL prepared by the Oil company, the express provision provides that royalty is due “at the well” or “at the wellhead”. This waives your right to a cost free marketable product. From the wellhead, The gas is in a raw form, and the Operator will pay you $2 / mcf. After the gas is processed and turned into a marketable product, it’s worth $3 / mcf. I want to be paid the $3 bucks, not $2 per mcf.
Note, my negotiation for negotiation/dealing in the force Pooling arena differs from the leasing stage dealing with the landman. In the Leasing stage, my clauses necessary for the RO are extensive relative to the RO’s nma’s. But If I “Can’t Work a deal with the landman” and I have to have my CFR clause included, I wait for forced Pooling. I can have my CFR clause included in the Final Order. See my previous Post. The Operator doesn’t like my CFR clause because all other unleased RO’s can then take advantage of my CFR clause if it’s included in the final pooling Order.
$195, that’s my total fee to represent someone to file the Objection, apparel in court and guarantee that the CFR clause is included. You can’t do it yourself for that small Fee.
You then ask, for an example of my CFR clause. Here tis’. Without charge. If anyone sees any improvement, please let us know by calling me or Posting.
My best and I hope this equalizes the playing field between you and the big ole’ Oil Company.
“Cost Free Royalty Payments: Lessee shall pay royalty on the fair market value of the marketable product, which is the price received by the Lessee at the final point of sale, with an arms length transaction, to a bona fide purchaser, without any post-production expenses or charges or any other cost of making the products produced hereunder ready or available for market being prorated back to Lessor. Such post-production expenses or costs are to include, but are not limited to, the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, manufacturing, transporting, and marketing the oil, gas and other products produced hereunder. Royalty will not be paid on a “raw product” as produced at the “mouth of the well” or “wellhead” but will be made on a “marketable product” as described above.
However, any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from the gross value of which Lessor’s royalty share is calculated as provided under the guidelines established in Mittelstaedt V Santa Fe Minerals, Inc., 954 P 2d 1203 (Okla 1998). If the product is enhanced, Lessor shall be notified in writing.”