Pooling

was just wondering what it is ...

The short answer I think would be the joining of fractionalized tracts to create a drill unit.

David:

As rw states, pooling brings together small tracts or factional mineral interests for the drilling of a well in a spacing unit.

Dear Mr. Little,

Since your minerals are located in Texas, we could write volumes about voluntary pooling. However, I wrote three elementary pooling blog posts here on MRF:

http://www.mineralrightsforum.com/profiles/blogs/rule-of-capture-re...

http://www.mineralrightsforum.com/profiles/blogs/the-basics-of-pool...

http://www.mineralrightsforum.com/profiles/blogs/pooling-in-texas-p...

These posts were meant to be read in the above order.

Different states have different statutes regarding pooling, but basicly a pooling gives the operator the right to drill even if he doesn’t have have all the mineral owners under lease.

To get very elementary about it, let's say you own 40 acres in a particular section in a county. Someone else who has executive rights signed a lease for you. A long time ago you were surveyed and have an Abstract number. Let's call it A-123. Oil company wants to drill, therefore making you and many others some money. 40 acres of yours are of course not enough to drill on. So the oil company takes 400 acres from yours, which is A-123 lot so and so and others. If there are 10 surveys with 40 acres each, it is accomplished with 10 "being pooled". Draw it on a piece of paper and put a small hole anywhere with a pen.. Assume that is the drilling hole. Then draw a line to your 40 acres and put A-123 on it. The drilling well hole has a name. You do not. You only have the A-123 and a well number after a permit has been pulled with the state. That well number is very important. Let's call the drilling hole the S. Claus well. You are now connected to the S Claus well underground horizontally approximately 10,000 feet down more or less. (as is mine) You will now and forever be connected to that well as long as it produces and will get money from the S. Claus well. You get your percentage according to the creage pooled. In our case 40 acres. This is the only way I understood it when two years ago I did not know how to spell O-I-L and someone offered me money to be pooled in La Salle County. When the S Claus is drilled, the oil co. reports it to the rr commisiion in our state and will give you production numbers, meaning how much oil they produced and sold. That takes no less than 2 months in Texas. Unless your lease specifies updates, you will not know what happens when. Then it gets a bit more complicated such as oil, gas, sour oil, sour gas, pipelines, infrastructure etc. I don't mean to insult anyone, like I said, this explanation is for people who have no idea how it works and I hope it helps. Here is the good news. You can have another well drilled from S. Claus if the spacing is right and desirable for the oil co, therefore you will receive money from both. Your A-123 will stay the same but another well number will be added, whch you can then keep track of also.

Clear as mud, ed?

I certainly hope it works the way Cookie says. A capped gas well and $1 per acre per year shut in royalty could change this fairy tale dramatically. Don't sign anything until you have help or have had the chance to do alot of study.

I was assuming he was already leased. This was not supposed to be legal advice. Of course it is a hypothetical explanation. When people first learn about their newfound luck of mineral rights, they don't want a doomsday story. They just want to know what it is they are going to be experiencing. Texas has been good to most in the Eagleford. Let's hope it keeps up. Never ever sign any papers without an attorney. In my case, we had no choice. We were not the executors. We were pooled. Period.

by the way, r.w. kennedy, do you know of any capped wells? What a nightmarish thought! Mine is being fracked and completed as I write this, according to Chesapeake. It has been a long 3 year wait. We are in the northwest corner of La Salle.

r w kennedy said:

I certainly hope it works the way Cookie says. A capped gas well and $1 per acre per year shut in royalty could change this fairy tale dramatically. Don't sign anything until you have help or have had the chance to do alot of study.

Cookie, I think most of the capped wells are Barnett shale dry gas wells. If I remember, in La Salle the drilling has been seeking the oily/wet gas window. I think lately that CHK has been intensely focussed on what pays in the immediate future because of the large loans they had to repay. I'm fairly certain that your well isn't intended to be dry gas.

No. It is oil and wet gas. They are supposed to be "completing" this week and as you know getting info is like pulling teeth. They told us we would not be paid for 9 months since there are infrastructure problems. It's always something.

Oh! The joy of waiting. I have some wells that were drilled and they didn't frack them for 9 months after, then another 150 days before first check. It will eventually happen, it just seems like forever sometimes. In 9 months they will probably have more wells completed so the infrastructure cost will be justified.

Dear Ms Downey,

I think that you are referring to forced pooling in a state like Oklahoma. His land is in Texas (as per his profile), which has absolutely nothing to do with forced pooling in Oklahoma.

The purpose of pooling is to combine two or more tracts into a unit that can be operated as a single lease in order to promote conservation and prevent waste (that's the theory anyway) and not to compulsory pool unleased interests.


Joan Downey said:
Different states have different statutes regarding pooling, but basicly a pooling gives the operator the right to drill even if he doesn't have have all the mineral owners under lease.

Dear Mr. Cotton

The discussion heading was simply Pooling “what is it” and other posters had already addressed that the purpose was to form a unit, It has been my experience, in general, that when a mineral owner asks about pooling he is usually wondering about forced pooling - thus my statement. No where did the discussion state that it was in reference to Texas lands and regardless of what the posters profile says he didn’t specify, therefore I am not aware that his discussion was apecific to a particular state. By the way, Texas does have provisions for pooling unleased interests.

Joan Downey Independent Petroleum Landman Title Specialist - 25 years

150 days would be wonderful. It was permitted in August 2012, fracked Jan 15. 2013 (?) The problem we were told is the gas. CHK said they will not flare. We are more than 1500 miles from Texas. It's A-335 Van Cleve B LAS

r w kennedy said:

Oh! The joy of waiting. I have some wells that were drilled and they didn't frack them for 9 months after, then another 150 days before first check. It will eventually happen, it just seems like forever sometimes. In 9 months they will probably have more wells completed so the infrastructure cost will be justified.

Yes Cookie I have already signed my lease my lease is located in terry county texas . I do have two dry holes on the 160 acres that I am pooled under as far as I know they were drilled back in the 80s .Not really expecting to get rich just leaves a bad taste in your mouth to get tottally screwed ,so really just asking lot of questions guess it may be to late but still like to find out this info.I wish I would have found this site before I signed my lease thanks for your responce..

Cookie Gartner said:

by the way, r.w. kennedy, do you know of any capped wells? What a nightmarish thought! Mine is being fracked and completed as I write this, according to Chesapeake. It has been a long 3 year wait. We are in the northwest corner of La Salle.

r w kennedy said:

I certainly hope it works the way Cookie says. A capped gas well and $1 per acre per year shut in royalty could change this fairy tale dramatically. Don't sign anything until you have help or have had the chance to do alot of study.

With whom did you sign?

Dear Ms. Downey,

If your intent was to explain the effect of forced pooling, perhaps you should have said so, instead of making people guess what the heck you were saying.

As to forced pooling in Texas, the ONLY use of MIPA for an Operator to force pool minerals was the very well publicized and criticized Finley case before the RRC, in 2009 I believe.

When I questioned the reasoning of the RRC ruling to now former Madam Railroad Commissioner Elizabeth Ames Jones (she resigned from the RRC to run for Texas Senate and missed the runoff), her response was the oil company was not able to find the lot owners (this was in the Barnett Shale). When I questioned her why the oil company did not seek the legal remedy under the Receivership Lease Statutes and why did the Commission ignore the obvious legal remedy, her husband (also an attorney stepped in) and said that the Operator did not offer any explanation of attempting receivership lease statutes.

Elizabeth Ames Jones has recently joined Patton Boggs.

The only explanation is the somewhat involved and time consuming procedure of Receivership leases. Odds are they were out of time and had to do something to get the rig running.

Since LinkedIn informed me that you looked at my profile, I looked at yours. I do hope that you find work soon.

Dear Mr. Cotton

The discussion heading was simply Pooling "what is it" and other posters had already addressed that the purpose was to form a unit, It has been my experience, in general, that when a mineral owner asks about pooling he is usually wondering about forced pooling - thus my statement. No where did the discussion state that it was in reference to Texas lands and regardless of what the posters profile says he didn't specify, therefore I am not aware that his discussion was apecific to a particular state. By the way, Texas does have provisions for pooling unleased interests.

Joan Downey
Independent Petroleum Landman
Title Specialist - 25 years

Buddy, thank you for your articles about pooling. It is helpful, though this subject remains a little confusing to me still.

I have a question about Situation 1. It's about the figure used for figuring the Net Revenue for Sam and Bill (200.) If non-leased parcels are not able to be part of the pooling (Buddy's 20 acres), then why would Buddy's acreage be included in the formula? Seems like the divisor in the formula would be 180, not 200. What about this am I missing?

Buddy Cotten said:

Dear Mr. Little,

Since your minerals are located in Texas, we could write volumes about voluntary pooling. However, I wrote three elementary pooling blog posts here on MRF:

http://www.mineralrightsforum.com/profiles/blogs/rule-of-capture-re...

http://www.mineralrightsforum.com/profiles/blogs/the-basics-of-pool...

http://www.mineralrightsforum.com/profiles/blogs/pooling-in-texas-p...

These posts were meant to be read in the above order.

Best,

Buddy Cotten

Mineral Manager

Try the eagleford forum in addition to this one. You will like it also. Go to the leaderboard and look up what you need to know.