We received notification that Citation has an application to the Corporation Commission to form a 640-acre horizontal drilling unit. They have also requested a Pooling of the interest owners in this area. In the Pooling request there is language under Relief Sought that request the Commission make definite provisions for the payment of all actual costs and expenses of drilling and development including a reasonable charge for supervision. Is this saying that the interest owners will bare the cost of drilling and development for any wells drilled? If so that seems like the mineral owners are being treated as working interest owners. Any clarification would be appreciated. Also, simultaneously I received a letter from another company offering options of Bonus $$ of differing amounts depending on royalty interest chosen should we chose not to be included in the pooling. I have never seen anything like this offer before and am somewhat confused as to what the second company is trying to accomplish with their offer. Thanks for any help.
You need to add the township and range to your post.
The mineral owners do not participate in the well unless they specifically choose to do so under the pooling order options. Not recommended for the novice. There are usually four-five options, the last one being participation. The first few are for mineral owners who do not want to participate.
The second offer letter is very common. It is most likely from another company that wants to lease your land and then use that lease to farm into being a working interest owner in the well. You can choose to lease with them if you wish. However, be advised that the original lease that they offer is probably not going to be in your favor with the wording of the clauses. It is also possible that the letter is from the leasing company for the operator. I do not sign them. I just lease with whom I wish or I wait for pooling and usually choose the highest royalty and the lowest bonus.
My apologies for failing to give the TS and Range, that has been corrected. Thank you for your response. The line from the Commission application that is a little confusing is where it says under “relief sought”, to afford all of the owners the opportunity to recover or receive without unnecessary expense, their just and fair share of all hydrocarbon substances produced therefrom, and that the Commission make definite provisions for payment of all actual costs and expenses of drilling and development, including a reasonable charge for supervision. Who are they requesting payment from? Our acreage was previously pooled into a drilling unit where there is currently a producing well(though small) in this same area where they are wanting to pool for their horizontal unit. We are not working interest owners so I’m a little confused by this language. Thank you again.
I have interest in sect 29 & 30 -so what is the townshipand range yous are asking about. Sid Eby
Township 1 South, Range 3 West.
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