What happens if I do NOT sign a lease ratification for Ector County, Texas? Is producer still obligated to pay me (Non-Executive Owner) the BONUS per signed lease by the Executive Owners? Also, does this affect royalty payments on future production? The reason for hesitating to sign is language regarding “pooling”. What response should I expect from the producer? Thanks!
If you are clearly a Non-Executive mineral owner, then the lease applies to your interest with or without your ratification, i.e., your ratification is superfluous. Oil company must think your non-executive status is unclear or, perhaps, oil co. employee is just incompetent … which I’ve seen a LOT more often in recent years.
Ask an attorney in midland or odessa
Thanks for quick replies! 18 months ago, on an entirely different lease ratification with totally different producer, as Executor of a family member’s Estate, the heirs signed ratifications as Non-Executive owners as well… and everyone had clear understanding of their “Non-Executive” status. So it is done. But I wonder if it more because the producer desires to lock in certain language such as “pooling”, etc.? Now trying to make a decision on a NEW ratification. PS: I don’t have a connection to any Ector County (Odessa or Midland) attorney and saw this Forum as a potential initial feedback opportunity. Thanks!
I stand corrected. Texas courts have held that the EMI owner cannot bind the NEMI owner with respect to pooling of acreage; therefore, if the subject lease has pooling language, then it is not binding on the NEMI owner unless ratified. That is most likely why the Lessee is requesting your ratification of the lease. Depends on the facts and circumstances for each lease since pooling can sometimes be advantageous to the NEMI owner.
If your interest is not in the drillsite tract, and your acreage was pooled into the unit, the failure to sign the ratification would allow the operator to avoid paying you any royalty proceeds.
Thank you dstallard and tim_dowd for your comments! I appreciate confirming we are NOT required to sign the ratification and not bound by its language. Also thanks for pointing out the downside a NOT signing. More for us to think about.