Questions on Ratification and Pooling of NPR Interests

I'm new to this forum and this business so bear with me. I've recently been contacted by an "Oil and Gas Man" who says he's working on behalf of the company that holds the lease and is producing where I own a small NPR. He says it will benefit me to "ratify" my lease which will allow them to "pool" my interests. He says this is a win/win situation and the production company is assuming that I will. He makes it sound like I'd be crazy to NOT ratify my lease. When I talked to a landman at the producing company, Rosetta Resources, he didn't seem to think it was a big deal one way or the other. Why is this guy being so persistent and is this something for me to consider? I would be grateful if someone can point me to how to make this decision. I'm sure there are probably lots of variables to be considered.

Thank you,

If your non participating royalty is in Texas and if a horizontal well has been drilled through your tract, is it possible that there is so much interest in getting you to ratify OR to sign a division order [de facto ratification?] because if you do not you could be entitled to far greater royalty payments? Without ratification could you be entitled to receive your royalty percentage on the entire well's production instead of only the fraction of the much larger pooled acreage? I hope some of the forum experts will expand on this.

Thank you AJ. I do know there are many permitted wells around that section any of them horizontal

You are welcome, David. Please see Lease Ratifcations and share if you learn more.

Hi David!

Welcome to The Forum.

Your decision whether to sign a Ratification or Pooling Agreement (which some people prefer) in part might depend upon where the lands in which you own an interest are located within a given Unit.

If you will provide the legal description to your lands, I will see what I can pull up on any proposed Units that include them.

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

Abstract 3891362, H&GN Survey Block 5, Sec 40 Thanks so very much!

David

Very helpful link to explanation of LEASE RATIFICATIONS. Always grateful. David

What County?

Reeves, Tx Sorry and thanks

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212-GLOINFOSHEETA1362.pdf (57.9 KB) 213-MAP21WELLS.pdf (73.9 KB) 214-TABLE21WELLS.pdf (79.3 KB)

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209-4238934411ROSETTATRIGGER40NO.6HPERMIT.pdf (1.33 MB) 210-4238934606ROSETTATRIGGER3940UNITANO.4HPERMIT.pdf (826 KB) 211-4238935528ROSETTATRIGGER3940UNITDNO.34HPERMIT.pdf (1.37 MB)

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I can't tell where your lands lie within Section 40, but it appears that the "40" Wells include the entire Section, while the "39-40" Wells divide it up.

Either way, it looks like Rosetta is taking the area seriously.

Some of the others might think differently, but unless you are much more familiar with the O&G industry than the average bear, I think you should either ratify the lease or request a Pooling Agreement instead.

Hope this helps -

Charles

207-4238935911ROSETTATRIGGER3940UNITCNO.33HPERMIT.pdf (1.91 MB) 208-4238936685ROSETTATRIGGER3940UNITBNO.8HPERMIT.pdf (199 KB)

So then what is the difference between ratifying the lease and "requesting a Pooling Agreement instead?" I thought they were one in the same. Not?

They want you to ratify a lease because it contains a pooling provision. But some people, especially "Old Timers" think that they are trying to dilute your NPRI by the royalty reserved to the Lessor in the lease. To avoid the possibility of that, they request a Pooling Agreement instead.

What are the chances the boilerplate pooling provision in a lease will vary with a pooling agreement if the oil company is constructing the document to sign? What elements would a pooling agreement written to the benefit of the royalty owner contain? And is it true that if the well bore goes through the NPR owner's tract who has not ratified a lease and said owner has also not signed a division order the NPR could be interpreted to apply to all the production of the hz well? Could that be the unspoken reason for the urgency to get a lease ratified or a division order signed in this type of situation?

What elements would a pooling agreement written to the benefit of the royalty owner contain? And is it true that if the well bore goes through the NPR owner’s tract who has not ratified a lease and said owner has also not signed a division order the NPR could be interpreted to apply to all the production of the hz well? Could that be the unspoken reason for the urgency to get a lease ratified or a division order signed in this type of situation?