I have a question about an NPRI royalty owner choosing to go non-consent on a horizontal pool.
My wife owns an undivided, floating NPRI royalty interest (not a mineral interest) in a tract that was leased by the executive mineral owners and subsequently incorporated into a horizontal pooled unit.
A very good horizontal well was drilled and completed for the unit and began producing last October.
In January of this year, my wife received a request to ratify the lease and unit designation. The tract my wife owns an interest in is the drill site tract and comprises 53% of the pooled unit, however in studying the unit’s well plat, it appears that 68% of the horizontal drainhole displacement (the calculated horizontal displacement of the horizontal drainhole from the first take point to the last take point) is located under the tract that my wife owns an interest in.
If my wife chooses not to ratify the lease and unit designation, and proceed as a non-consenting NPRI, would the lessee be required to allocate her royalty based on the percentage of the horizontal drainhole displacement under her tract? If so, it would appear advantageous to go non-consent as that would result in higher royalties over the life of the well.
I know that if it were a vertical well, she would be entitled to her interest in the total production from the well, undiluted by the pool agreement, however, I’m not sure how it works with horizontal wells.
Also, if the Lessee chooses another, less favorable method, is there any recourse?
We would appreciate any insight anyone on this site might have for such a situation.