Received Docs for 2 Units in the Permian Basin composing of 5 horizontal wells asking me to ratify (or participate) in pooling with adjacent mineral interests owners. I’m new to mineral interests ownership. My interest is NPRI. The operator is ConocoPhillips so a well-known entity. Trying to figure out why this is necessary and what my options are. I understand it changes the way the royalties are calculated, but I’m being told by the landman working with me that it won’t make much difference based on acreage and what he calls a straight line calculation, so again, if no difference, then why the need for executing these docs. And, what are the risks/outcome of not signing. I’m already getting royalty checks, so obviously there is some default method for calculating my payments. Looking for someone in this forum that might have some insight/advice. Thanks.
**Generally, you cannot pool an NPRI without the owner’s consent to pool. **A lot depends on which tracts the well bore passes through. If it passes through the tract which is burdened by the NPRI, the NPRI owner must consent to the pooled unit in order for the oil company to pay the NPRI owner for their pooled share of production. If they do not obtain consent then the NPRI owner must be paid on a non-pooled basis (as though unit production came solely from the tract burdened by the NPRI. However, if the well bore does not pass under the tract burdened by the NPRI, absent a ratification from the NPRI owner, they will not share in unit production. Obviously a lot of other factors come into play, the size of the tract, the size of the NPRI, the size of the unit, if these wells are subject to an existing allocation agreement, if the allocation formula is based upon surface acres or lateral lengths, and other factors. With 5 wells involved, I would definitely recommend having an oil and gas attorney review all of the relevant documents and information in order to advise you of the best course of action.
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