POOLING UNITS created by the State of Texas

In an email in March with the landman associated with our well, he mentioned that our two sections In Reeves County had been/or are being included in a pooling unit, named Cortez Bank Unit, by GLO.

My question is should we have been notified by GLO of this matter?

Your lease may have given them the right to pool. I don’t remember being notified when they pooled ours.

The GLO RAL lease gives the GLO the right to pool or unitize your royalty interest. The pooling provision of the GLO RAL lease requires the lessee to receive the express consent of the School Land Board and the Commissioner in order to pool or unitize the State’s interest. The same pooling provision grants the lessee the right to pool or unitze your (“owner of the soil”) royalty interest under the same terms as approved by the School Land Board and the Commissioner for the interests of the State. The GLO RAL lease imposes a fiduciary duty on the owner of the soil to the State of Texas and the State owes no such duty to the owner of the soil under the lease.

Hi Jag, So this means as an owner of surface rights only (I NOW HAVE NO RIGHTS AT ALL) Is that correct?

Hi Mavis, good to hear from you! No, as the owner of the surface you do have rights…you just don’t own the minerals. As agent for the State the surface owner has a right to receive a portion of the revenues generated by the lease in lieu of all damages to the soil.

Hi Jag, How would I know if the land has been leased? Would I be notified as the surface owner?

Mavis, as the Surface Owner you are the Agent for the State. If the land hasn’t been leased by a prior Surface Owner, you will be the one to negotiate the terms of the lease and sign it. A Landman will contact you. You will receive 1/2 of the Signing Bonus Payment and 1/2 of any royalties from any oil and gas sold. The State (actually the State School Fund) gets the other half.

As a surface owner, you will only lease the minerals as agent for State of Texas if the minerals under your tract are RAL (Relinquishment Act Land), often called mineral classified. RAL were properties sold by State after Sept 1, 1895 and before Aug 21, 1931. Sales after that date, State may have reserved 100% of the minerals, including all lease rights, or retained a 1/16 royalty rate or other terms. You would need to research your particular tract. If you only have surface rights, then no one has any legal obligation to notify you when the underlying minerals are leased or included in a unit. If the well is located on your surface tract, then you will be entitled to damages. Or if a pipeline, electric line, road, etc crosses your surface, then you will sign a ROW and receive compensation.

1 Like

Hi Mr Tooke and Tennis Daze, I am learning so much, I only found this after I replied to the other posts from Mr. Tooke. Now I have to go back and check all the information Mr. Tooke sent me. If I understand this correctly, there no one has any obligation to notify me when minerals are leased, but are they obliged to contact me if they are using my surface rights? I do appreciate all the work you have done Mr. Tooke and thank you TennisDaze for trying to teach me what is going on. Regards Mavis Palmer

Yes. They only have to contact you if they want to use your surface rights for something. They might even offer to buy your rights from you.

This topic was automatically closed after 90 days. New replies are no longer allowed.