Gary; the only thing I see is in the letter outlining the proposal. It says “If you desire to participate in this proposed operation, please execute and return a complete copy of this letter and one fully executed AFE, JOA signature pages, and Declaration of Pooling, along with a payment of your proportionate share of the AFE, within thirty (30) days of receipt of this correspondence.” Does this mean that in order to receive possible royalties, as outlined in the original lease, I now have to pay PDC almost $6000? What is “statutorily pooled” and what are “applicable penalties established by the COGCC”?
My brother, sister and I own mineral rights on the old family homestead. These have been leased for 4 years and we just received a packed from PDC energy (lease is now with Synergy) saying they are proposing “to drill, complete and opeate the captioned horizontal well to an approx. depth of 7412 to test the Codell formation”. Under the Authority for expenditure paragraph, it says my share of the cost is nearly $6000. YIKES! I have 30 days to respond as consent, non-consent, or be statutorily pooled and subject to penalties. What does this all mean?
Jan, Look in the preamble of the PDC application to see if the people listed may have the right to participate. To add to Jenna’s comments, it could be that Synergy, who has control of your minerals by lease terms, and PDC can’t come to an agreement so it is Synergy’s interest that is being pooled while you are on the list for being an owner of record.
Unfortunately for mineral owners, I see this going on more and more in Oklahoma and North Dakota making the lessee all the more important when granting a lease. Noble was a great first choice but you had no say as to what they could do with your minerals once you signed up. Now you are just along of the ride. I hope your lessee cooperates and gets a well drilled for your benefit.
Jan if you are leased then you would not be paying for development costs unless some bizarre language regarding mineral owners is in the lease to that bizarre effect. I am sure the previous lessors (pdc, noble etc) are paying for percentages of the developement. I am more then glad to look at the lease for you if you dm me.
Gary, Jason, and Jenna; I found out some more information. The actual well will not be on our lease, it will be just west of our lease and will be drilled horizontally into our area. Does this make a difference in the reason for the $6000 payment? Since Synergy has the lease, wouldn’t they take care of it all? I tried to read the Interests of Parties in Costs and Production. The legalize is beyond me!! However, my brother is looking for an attorney to help sort this all out. Anyone know a good attorney in the Greeley/Ft Collins area?
As Gary mentioned - often times when the companies cannot reach an agreement, then one company will utilize COGCC process to proceed with drilling a well and it could be Synergy’s lease interest being pooled. It is important for you to go through and figure out what is going on with your lease and interest, especially before you send in any money to anyone. Many companies send out blanket letters these days in Weld County, and there is a distinct possibility that the request for the money is not directed to you and additionally is not appropriate for you to send in.
The information is for general information purposes only. This should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.
Jan, I live and work in Colorado and am the President of the National Association of Royalty Owners. I am happy to help answer your questions. I am also a landman and have been for 35 years. [email protected]
Mike,
Email me at [email protected] if youd like so we can talk more about this, I check my email far more often than this website. In short, sometimes companies will apply for permits months before they begin to lease because the permitting process can take so long. What Sec/Twn/Rng are you in?
I am hoping someone can explain why several oil companies in my area have recently been applying for permits to drill when they do not have the lands leased where these wells are to be drilled. There are also several cases where more than one oil company has applied for a permit and spacing order in the same sections. Some have also not notified the owners as required by WY statute. This activity seemed to accelerate at the end of August of this year. Anyone have an explanation for this behavior? I live about 4 miles north of the Weld County, Colorado border, in Laramie County, 12/63. Thanks,
Can anyone explain to me how shut in payments are calculated? We had the majority of our wells shut in for most of this year, yet we are recieving pathetic payments as low as $11 on one well.
Linda, It depends on what the lease says. They are usually paid $1 per acre shut-in per year. But each contract is different. Derek
Derek, seriously $1 per acre per year in compensation for $thousands in lost royalties. Why do they even bother?
Mike Oberwise, permits are generally cheap to get. It probably cost the state more to process the permit than the fee covers.
I have been tracking lease prices and royalty rates in Weld County for over a year now, and I can help you both better understand what you are dealing with. I have 4 years experience working as a landman negotiating leases for producers. Email me if you want to get a better understanding of what you are dealing with. [email protected]
Derek
Helping my mother with her mineral rights. Looking for info regarding a company called DJ Resources who are looking to extend an expiring contract. They are offering $380 to lease the property for 2 years not sure if that is the standard rate or if anything has been done on the property. Do we have to let them renew the lease? I’m in California so this is all new to me.
Steve
Thanks Derek and Jay, I first need to find out if we have to allow them to extend the contract and if yes, do we also have to accept their offer without any negotiating. We don’t own a huge amount of acre’s, only about 8 in Weld County. But being in California it’s feels strange not knowing if this company is actually drilling or producing anything.
Steve
We need to hire someone to look over family producing wells, and paperwork we have received recently from co., to determine if we are making the right decisions. Is this a landman or oil attorney? Any recommendations, pls email us.
I can tell you 90% of the landman are unemployed currently much like the roughecks on Drilling Rigs. Going rates vary but today leases if you can get any interest are going for 50% of 3 years ago. private message me if you want the names of two real good sole practioners oil lawyers with fair rates.
HI all. would be interested in hearing your take on force pooling in Colorado. . had been approached to lease but it was a very low offer I felt. . they threw out the force pooling threat. . seems to be a smaller company but cant tell for sure. Just want to know what options may be.
thanks for any input. I think we have 20 net roughly under the section they are proposing to pool (sections actdually its a 1280 they want to pool seems like a lot of acreage again.
Doug Miller
Pardon me DM but what section, township and range are your rights in? Depending on how old the other leases are perhaps the average will be better then current offer, something to think about it…