I just got a certified letter from one of my operators telling me that they have filed for pool commingling of three wells . . . only one of which I have an interest in. Should I be upset? What are the downsides? I really know nothing about this and have zero experience!
I searched the archives here on this forum and it appears there one owner was upset because he felt like he was treated differently than the other owners involved in the pooling. I have read and re-read the letter and information I got and I can’t find any references to my decimal interest.
If the wells have not been drilled yet, then the decimal interest is not known yet. If they have, then contact the operator.
Which state is the pooling in? Laws vary by state.
The wells are located in Lea County, NM. The letter says “the commingling of oil and gas from all existing and future wells on the Vamonos Fee and the Grey Matter Fee leases. The current wells, Vamonos Fee 5H and Grey Matter Fee 2H . . .” But later it lists those two plus Roof Pizza Fee H5, so I’m guessing all three are included. We only have interest on Grey Matter 2H.
Are we sure they are not just surface commingling these wells? Metering the oil and gas separately (to tell which well it came from) and then putting it into the same tanks/battery…
Combining liquids (commingling) and not interests (pooling) as it were.
For surface commingling, no, you should not be upset. Non-issue. But if you need clarification just call Steward and ask them.
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I will call Steward! But I believe you are right. Another instance where my lack of knowledge and experience caused problems. Thank goodness for folks like you who very softly suggest I’m likely out in right field!! Hahaha! Thank you!
If this is a situation of commingling the production of the wells, there is little to be concerned about as long as the production is properly accounted for back to each individual well. If this is a pooling situation there is a lot more information to be gathered before one could provide you with an educated and accurate opinion of your specific situation. My thoughts from 30,000’ are that this is a good thing for you. The operator would liking be pooling acreage to accelerate future development. Your revenue interest would be reduced from what you currently own; but, it would cover a larger area thus diversifying your position and allowing you access to broader development. Assuming all the wells in the pooled acreage are the same or the additional acreage you gain the benefit from is superior this would be positive for you. If the acreage you would gain additional exposer to could not be developed for some reason (city limits, water, etc.) for is less favorable geologically then it would likely be detrimental to your current situation. There is too much that would need to be known to provide you with an accurate opinion. You should gather as much information from the operator as you can.
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