Texas Royalty Lease problems: In 1929-1930 my great grandparents issued a lease for one-eighth. In 1965 my grandmother participated in a family settlement where she retained a 1/56ORRI in the existing royalty. In 1981 my great aunt died intestate so her 1/56th was divided by the 6 siblings heirs. In 1982 Sun Oil leased for 1/6th. The 1982 sun oil division orders ignored my grandmother 1/56 ORRI and recognized 6 mineral owners not 7. My grandmothers interest would expire when the wells became unproductive, however, the wells still pump today. In 1983 a unit was formed. Only 51/216 acres of my families land joined the unit. The Sun Oil lease expired in 1985. Sun Oil leased again in 1985, everything was the same but the land amount was more. Two checks were paid, one on the unit basis one on the lease basis. 1986 the field sold. The new operator paid on the lease basis only. Some tracts fell out of lease due to lack of production. In 2001 the operator leased those tracts with a Pounders 88 (7-69) with 640 acre pooling provision. In 2003 the lease sold. New division orders came out. The lease amount went to 1/8th paid off the unit basis 100%. No owners joined the unit since 1983-1984. How can a pooling lease force owners into a unit? I understood the pooling lease can only pool the tracts listed within the pooling lease. How can an operator revert back to a 1929-1930 lease after owners were receiving 1/6th? The 1929-1930 leases were holding the lease when it sold to Sun Oil in 1982-1985. The unit does state that upon termination of the unit agreement, the further development and operation of the unitized formation as a unit shall be abandoned and the unit operation shall cease, and therefore the parties shall be governed by the provisions of the leases and other instruments affecting the separate tracts. Has the operator abandoned the unit? Has the operator underpaid me since my grandmother had the 1/56 ORRI in 1965? I have an attorney that is talking to the operator but the operator isn’t giving up much information. Any Thoughts on these issues? Thank You
In answer to your primary questions: in Texas, most ORRIs expire when the current lease expires. However, it depends on the exact language of the document that created the ORRI so you will need to check that. Secondly, an operator does not have to have each owner leased in order to drill. It depends on the Railroad Commission rules for that tract. Whether an operator can pool only part of your property or must pool all of it depends on language of the operative lease. Texas has a Forced Pooling Act which allows an operator to force mineral owners into a pooling unit if the criteria of the statute are met. Finally, many operators don’t have a lot of information about operations prior to the time they took over so the current operator may be limited in what they can tell you.
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