My family hired an attorney and in the contract she had written that at different depths we could only be pooled with so many acres. If under 10,000 feet we would be pooled with 640 acres and if above 10,000 - 7,000 feet we would be pooled with 320 acres. This is for gas. The landman agreed and then changed his mine. He said if they struck gas at 7,000 feet and in the contract it stated we could only be pooled with 320 acres and the rest of the leases in the area said they would be pooled with 640 acres at this depth we would get no money. Now, the landman wants us to change the contract. They are planning on drilling the well approximately 1000 feet from our property line. Does anyone know if it is true that if all the leases say in the area gas pooled with 649 acres we would have to have the same acreage in our contract?
A solution could be that you change the agreement to 640 acre pooling for gas, but all your lands must be included for the well drilled 1000 feet off your line.
Buddy Cotten
The well that is 1000 feet from our property we weill be pooled with. That is why I do not think it makes sense that if they drill at 7000 feet and we would not be able to just pool with 320 acres. The landman says that all the leases in the area say 640 acres and because of that we would not be included in the pool at 7000 feet If they find gas. At 10000 feet we would be pooled because at that depth it says in our lease we will pool with 640 acres. It doesn't make sense to me since the well will be so close to our property.
What it means is that they would have to draw the line around the boundary of the 640-acre unit to EXCLUDE any of your lease acreage. And if you are outside the boundary of the pooled unit, you will not share in the royalties from the unit. Everyone whose acreage IS included inside the 640-acre unit, they will be paid like this: Royalty Rate x Owner Net Acres in Pooled Unit / 640 acres. For example, if an owner had 60 acres of their 3/16 lease included inside the pooled 640-acre unit and they own a 50% mineral interest, their net acres will be 60 x 50% or 30 net acres. So their calculation would be: 3/16 x 30/640. But since your lease's pooling clause limits your dilution to a maximum of 320 acres, there is no way to include your land in the pooled unit because you cannot be calculated using 640 as the denominator (bottom number) in the acreage calculation.
Even though the well surface location is 1,000 feet from your lease line, they have the legal right to draw the boundary line going right down your lease line, shutting you out.
Do you mind sharing with us the reason why you decided that limiting pooling to 320 acres is advantageous for you?
The larger a unit is the less royalty payment you would get per net mineral Acre! Be real glad the 320 acre clause is in your lease! If they want to drill on your minerals then they are limited at that depth on a gas unit to 320 Acres. That is a big plus for you!
Be glad! Count your "lucky stars".