I have a cousin that needs some help. I have offered to help get his records straightened out but have some questions on forced pooling.
If he was forced pooled but doesn't know it due to never receiving paperwork, is he entitled to choose a percentage of royalty and the bonus election?
Let me clarify as this lease has been in effect for years. lets say 100$ @1/8th or 75$ @3/16ths.
Is it mandatory to take what they offer or the lowest amount of RI or is it an option to choose the best? Terry
What is the section, township, and range. I often take 1/5th on a pooling. You have 20 days to return tour choice and use certified return receipt.
Pooling usually holds one specified zone, so every other formation is open for father leasing and development except what, as you indicated, is held by production at maybe a 160 acre or smaller spacing.
There are numerous leases involved. He was settling an estate and had no authority to make the selections. He now has the minerals in his name from his father's estate. Some were forced pooled with no election made (see above) and he was stuck with one at 250 @ 1/5th and another at 350 @1/8th. Never would he have taken 1/8th RI. But due to no election he is stuck with it. I guess my question is while it was in probate is there a chance to straighten it out and take a better RI?
The pooling order lists the options available to a respondent. They usually include a) the right to participate, b) a lower cash bonus and a higher royalty, or c) a higher cash bonus and a lower royalty. If a respondent doesn't make an election, he is, under the terms of the order, deemed to elect the lower royalty and higher bonus.
If your question is can you negotiate a better deal than what is in the pooling order? Yes, but not usually with the applicant. They have no incentive to bid against themselves. Now, there may be third parties who want to participate and they will contact a mineral owner to make a better deal than that offered under the pooling order. A mineral owner, if the time hasn't run out, can certainly lease to this third party.
Now, as to lack of notification, it is difficult to vacate a pooling because of lack of notice. But, in the rare circumstances where the corporation Commission has done it, it has to be a blatant lack of notice. Now, as the pooling has been in effect for years will likely kill any chance to vacate the pooling as to your cousin.
While it was in probate the Personal Representative had the right to make an election, and if didn't do so, then your cousin can't jump in now.
That was my assumption but wanted to be sure. The advantage is almost always on the oil company's side. Thanks for your response. Terry