LEGAL OR ILLEGAL POOLING

In Texas, Oil Company “A” Has 23% Of Tracts 7/8/9/21/22 In the unit. 77% of those tracts are out of lease, therefore not in the unit. Oil company "A’ asks the mineral owners to sign a producers 88 (7-69) with 640 acre pooling provision. 79% of the owners signed the lease 21% of the owners did not sign. Tracts 21/22 had production tracts 7/8/9 had no production. No other tracts were listed on the lease. Oil company “A” also operated tracts 20/24/31. 23% of 20/24/31 are also in the unit. Tracts 20/24/31 are held by a 1930 lease for 1/8. The pooling lease is for 1/4th. The primary term for the pooling agreement is 2 years. The lease states that if the lessee pools they have to file an instrument at the court house describing the new unit. No instrument was filed prior to the expiration of the primary term. The pump jacks were removed from tracts 21/22 for 3 years . No production should terminate the lease ? No production, no instrument filed but yet the oil company files new division orders for 1/8 and starts collecting oil onto one central location as if the field, including my families land is now in the unit. Can landman Mark Oates solve this puzzle? Isn’t this pooling or unitizing illegal? Shouldn’t the oil company be paying on the lease basis? Any help is appreciated, JIM.

Not enough info to make any definitive response. Which section are included in the unit? Which tracts does the well bore(s) pass under? Is there a unit designation filed in the county? If this is West Texas, are these “allocation” wells?

I see there is no unit filed in the county. You refer to a “pooling lease” and “pooling agreement” Is there a separate agreement other than the pooling provisions in the lease. If there is no instrument of record in the county to properly pool the leases, it is likely that the lease are producing on a lease basis only, and therefore royalties should be paid on a lease basis.

Thanks Frank for reading! There is a unit from 1982 and it is filed however only 23% of my family members signed this unit agreement. In 2001 a producers 88 with 640 ac pooling provisions was used to lease 109 acres with no production. This 2001 lease didn’t have any instrument describing any parts of any pooling filed at the court house. After the 2001 lease, we all began getting paid on the unit basis and all the storage tanks were picked up off our land. I think this is illegal. The operator that did this lost the field in a law suit. The new operator wont listen to me when I tell him the 2001 lease is void (except for 23% that is in the unit) and that he has to pay me 77% as a cotenant.

To get a final answer, you need to consult an attorney who can review all the related documents and relevant well and unit information. The exact wording will affect your legal position. Frequently, if the lease gave the lessee blanket permission to pool up to 640 acres, then the mineral owner is subject to a unit up to 640 acres. The lease would rarely cite a particular unit. You need to research to see if a unit designation was filed. If there was a 1982 unit and this acreage was included in 1982 (or added in an amendment of the unit) and the lease gave consent to pool, then again you would most likely be in the unit. If you signed division orders and accepted the royalties, then you may have effectively consented to the unit. Again, only an oil and gas attorney can give you a definitive answer depending on all of the surrounding facts, circumstances and legal documentation. If your lease has terminated, then your attorney can advise you on the best course of action.