In 2017/2018 I verbally negotiated with MRC Energy a lease on above lot in Fall City with no agreement. I was last to offer $ 600. Lease 3 year, no option, 23% Royalty! I did not hear back.
May 2018 I received Notice of application to Railroad Commission for Encana Oil and Gas for a spacing exception permit well location Bernice Unit 10H, 668.11acres. I decided not to protest because of legal fees.
My question is should my family receive royaltys from this well even if we had no lease?
My understanding of this is, since there was no lease, your tracts cannot be pooled by the operator. I suspect your tract was within 330’ of the well bore to be given the opportunity to protest?
Tracts can be included in a well if the operator has any undivided interest under lease. The remaining unleased mineral owners in the tract are essentially treated as working interests who come in after payout. This is different from a well location issue.
If my attempt was successful, attached is the plat to Bernice 10H. (If not , go to the Texas Railroad Commision Oil and Gas division online query system to launch drilling permit query and look up the permit plat). If your mineral interest is in the rectangular tract outside the unit, no royalties are due.
If your tract is included in the well and you are unleased, then your total portion of the revenues is paid toward your share of the well costs (drilling, completion, operating) until “pay-out” (recovery of the costs). Then you receive all the revenues for your share of the well and pay your share of continuing expenses. Here is a discussion - Pooled Units and Unleased Mineral Interests — Oil and Gas Lawyer Blog — December 7, 2009