My wife, her two sisters and their uncle inherited mineral rights in Lea County New Mexico. The uncle has leased his rights. The three sisters have not leased their rights. Can the oil company drill a well without leasing the rights of the three sisters? Thanks.
Yes. The sisters will be unleased mineral owners and exactly how that is handled is determined under New Mexico state law. More likely if the net mineral ownership is small relative to the well acreage. The oil company has to file with the New Mexico Oil Conservation Commission for compulsory pooling and have a hearing. The order will state how unleased mineral owners are treated. You can look up permits under company name or by section and you can watch for filings and hearings under the company name. The order will specify the acreage and formation. Take some time and explore the website at
http://www.emnrd.state.nm.us/OCD/
Here is excerpt out of the referenced article - New Mexico’s compulsory pooling law requires non-consenting owners to pay their share of production costs, plus a risk-penalty of up to 200 percent of these costs, out of that owner’s share of the profits from the drilling unit. This means the well will have to recover 200% of the drilling and operating costs before the unleased mineral owner will participate in the well.
http://www.ncsl.org/research/energy/compulsory-pooling-laws-protecting-the-conflicting-rights-of-neighboring-landowners.aspx
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