Force pool or lease with ‘bad’ terms, 19 8n 8w

[Mark_G_Smith]

Is it better to be force pooled if there is any drilling done or agree to a lease with terms that are not optimal? Operator doesn’t want to agree to terms that consultant advises. Issues include the is post production cost in exhibit, , one is ‘cumulative’ vs consecutive’ years re shut in clause, and royalty provision in lease-operator doesn’t want to pay for oil, gas snd water usef

[tim_dowd]

Without getting into the weeds too much. Generally, the pooling order follows the Middelstaedt case. so, you won’t get your terms if you get pooled. Further, there is nothing in the pooling order that limits the years that a lease can be held by shut-ins. In a pooling order, you won’t get cumulative or consecutive years. Therefore, if you think you’re going to get part of your clauses by getting pooled, rather than leased, you won’t. The last thing is if the company decides not to drill the well due to poor production next door or o&g prices drop, will you kick yourself for not taking the lease bonus and holding our for the pooling? In other words, money in hand vs. money in bush, etc.