Pooling Questions

Question - I am trying to figure up my pooling and can’t seem to back into the decimal interest that they show we have. What is the formula ? I was told I need a landman to help me on this ?

The answer depends on the state and the terms of the pooling. Generally speaking, you take your acres divided by the unit size times your royalty percentage. There may be other calculations to consider as well such as multiple section wells etc.

This is in Texas. Would the unit size be the total acres they are horizontal drilling thru and can be found on the drilling reports that was filed right ?

What if you dont come to the right decimal that they come up with dont we have a right for them to explain to us ?

Is there a pooled unit with a DPU (declaration of pooled unit) filed that states the unit acreage and that royalties are paid on your net mineral acres in the unit? Or is this a sharing or allocation well I which case most likely the royalty decimal will be calculated on the number of feet of the productive lateral crossing your minerals vs the entire productive lateral. The productive lateral is the distance from the first take point to the last take point in the horizontal wellbore and that is listed on the completion report. Generally you have to look at the as-drilled plat to see the number of feet on your tract. You can ask the operator for information on how the DOI was calculated. I think there is a Texas legislature proposal to require this. If you post the operator, well name, county and hopefully API number, you can get more help here.

Thank you I’m gonna try this and see if I can come up with the decimal that they come up with

This is what we have:

Callon Petroleum Operating API 42-227-37722 API 42-227-38808 API 42-227-38866

They say our decimal interest is 0.00120233 and I can’t get to that number

Have you tried to email the Land Department or the Division Order Department of the oil company and requested the formula they used to calculate the percentage shown on your division order? I know some are hard to get a response from but many will answer you eventually.

These appear to be pooled unit. Completion reports for new wells has 475.15 acres in unit. Your DOI will be based on your royalty rate and your net mineral acres in the unit. For example, if your royalty rate is 0.20 and you own 2.8564355 NMA, the royalty DOI = 0.20 X 2.8564355 / 475.15 = 0.00120233

My interest was 1/48 and my mom given me her 3/16 How did you do that formula ?

Do you mean that you received 1/48 interest in X number of gross acres and also acquired 3/16 interest in the same X gross acres? In that case, you owned 1/48 and acquired 9/48, for a total of 10/48 interest in the gross acres. How many gross acres? Look at the legal description in the lease which should specify the number of acres. (This number could change slightly if the oil company had a survey performed.) If there were 48 gross acres, then you own 10/48 X 48 acres = 10 net acres. If there were 5 acres, then you own 10/48 X 5 acres = 1.0416667 net acres. Are the interests under the same lease or are they under separate leases? If 2 leases, did the leases have the same royalty rate?

I had 1/48 and then my mom passed away and she given me her 3/16. 48.75 acres we have. The interest are under the same lease I looked on line under the railroad commission and notice there are several wells doing horizontal wells thru it Trying to find the lease from my mom file and havn’t come across it yet Do you mean the total acres that the wells say on the drilling reports ?

From your information, you own 10/48 X 48.75 gross acres = 10.15625 net acres. The royalty would be calculated as 10.15625 net acres / 475.15 unit acres X royalty rate. Your best course would be to contact the division order department to ask what their records show as to your ownership and royalty rate and to be sure that you have been credited with your mother’s minerals.