I need a refresher on what is Pooling Is there Forced Pooling in WV?
Good evening,
Pooling means to pull your net mineral acreage into a drilling unit. When a E&P company decides to propose a horizontal drilling unit, they record DPU’s - Declarations of pooling and unit agreements. This shows you who the company pools into the unit.
The State of West Virginia does have forced pooling called co-tenancy.
West Virginia Gov. Jim Justice signed into law HB 4268, the “Co-Tenancy Modernization and Majority Protection Act.” July 1, 2018 and essentially acts as a forced pooling.
WV Oil & Natural Gas Association Link.
I hope this helps answer your question.
In more laymen terms, effectively pooling means what it sounds like; a “pool” of oil is “defined” and you are contributing your oil to that pool. For example, you may own 40 mineral acres that are included in a well that draws from a pool of 640 acres. In this case, you are contributing 40/640 = 6.25% of the oil that gets extracted by the well. Most people sign a lease that entitles them to a royalty, so rather than than have to fund their share of the well cost and get 6.25% of the revenue, they instead fund $0 of the well cost and get say 20% of their 6.25% share of their oil (1.25%)
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