# UMO and TRRC Rule 37

**URL:** https://www.mineralrightsforum.com/t/umo-and-trrc-rule-37/16201
**Category:** General Mineral Rights Discussion
**Created:** [May 1, 2013, 12:54pm UTC](https://www.mineralrightsforum.com/t/umo-and-trrc-rule-37/16201 "2013-05-01T12:54:04Z")
**Posts on this page:** 3
**Page:** 1

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### Author: ![C\_E\_R](https://www.mineralrightsforum.com/letter_avatar_proxy/v4/letter/c/7993a0/32.png) [@C\_E\_R](https://www.mineralrightsforum.com/u/C_E_R)
#### Post date: [May 1, 2013, 12:54pm UTC](https://www.mineralrightsforum.com/t/umo-and-trrc-rule-37/16201/1 "2013-05-01T12:54:04Z")

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Scenario: An Operator forms a pooled unit consisting of 2 sections (19 & 30). Operator has a leased 25% undivided interest in N/2 of section 19 and UMO has other 75% undivided interest in Section 19. So, a co-tenancy arrangement exists in N/2 of Section 19.

Operator also holds 100% leasehold in Section 30. A pooling agreement exists between all the other lessors in Sections 19 and 30. Operator plans to drill a horizontal well with drill site being in the N/2 of Section 19.

TRRC has established that unpooled mineral owner within a pooled unit creates a "property line" for Rule 37 spacing exception purposes.

Since UMO has a co-tenant relationship with the Operator in N/2 of Section 19, and Operator holds 100% of leasehold in Section 30, would Rule 37 be applicable?

I have read many articles on this, but none talks about a co-tenancy situation.

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### Author: ![Buddy\_Cotten](https://www.mineralrightsforum.com/user_avatar/www.mineralrightsforum.com/buddy_cotten/32/5079_2.png) [@Buddy\_Cotten](https://www.mineralrightsforum.com/u/Buddy_Cotten)
#### Post date: [May 1, 2013, 5:32pm UTC](https://www.mineralrightsforum.com/t/umo-and-trrc-rule-37/16201/2 "2013-05-01T17:32:48Z")

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A proration unit or drilling unit has no title significance. Fact is, the operator does not even have to have all the interests under lease to form a proration unit in Texas. On horizontal wellbores, it becomes a sticky wicket.

If the first take point is 467' off the N/2, then you are left outside the gate, gnashing your teeth.

A good way to limit your exposure on being left out is to sign a lease, or offer to join and pay your way from day 1. Signing a lease is your better tact, generally. In Texas, it just may not be wise to not execute a lease.

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### Author: ![system](https://www.mineralrightsforum.com/uploads/db5755/original/3X/6/c/6c7c56608c843272ad6e3662ce9562a5956f173e.png) [@system](https://www.mineralrightsforum.com/u/system)
#### Post date: [August 15, 2018, 2:11am UTC](https://www.mineralrightsforum.com/t/umo-and-trrc-rule-37/16201/3 "2018-08-15T02:11:53Z")

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