Can forced pooling be used on an already made lease?

As with many folks people are trying to have addons to their original lease to allow 1240 or bigger units. Now here is the question, if you already have a lease that states x acres for horizontal well and you do not sign the addon will they force pool you?

Do they need to make a conscious effort to get you to sign? What constitutes this effort if they do? IE: Knocking on your door and saying sign or nothing, or knocking on your door, offering you some benefit in the lease IE higher royalty, money up front, letting you make amendments to the lease etc. ?

We signed a lease for x amount of acres, we're in an undrilled unit of more than that already verified by ODNR.

As you can see this is why I raise these questions.

Thank you folks in advance! -Ohio

Views: 1039

▶ Reply to This

Replies to This Discussion

Permalink Reply by Bill Barnaby on December 17, 2013 at 2:22pm

This must be fairly unique since no one has chimed in.

Permalink Reply by Joseph-Ohio on December 18, 2013 at 10:11am
Guessing that's because none of us know the answer ! !

Smells like one for the courts (should it ever occur).
Permalink Reply by Jim Litwinowicz on December 18, 2013 at 9:09am

Bill; good question. Since I live in Pa, I don't know the answer for ya. Hoping someone will chime in.

Permalink Reply by Joseph-Ohio on December 18, 2013 at 9:57am
Helluva good question.

If an E & P filed a forced pooling 'Application' that included land already leased; would the ODNR's Oil and Gas Division Chief have the power to override the terms and conditions of the lease if he / she thought it 'just and reasonable' ? ?

In my most humble opinion, that Ohio 1509.27 gobbldygook needs to be thrown into the circular file.

What problem does it solve ? ?

In my most humble opinion (albeit from my landowner perspective) it only creates problems where there were none.

Also in my most humble opinion the only reason it exists is because the O & G E & P nterests want to wrest control of the hydrocarbons owned by the landowners from the landowners.
Permalink Reply by Billy Park Whyde on December 19, 2013 at 12:22am

Wasn't there not long ago in Ohio a situation where leased land was forced pooled upon the lease holder (a O&G) of that land? If I recall our question at that time was what about the landowners rights? It was not a cooperative flip of the lease.

Permalink Reply by Joseph-Ohio on December 19, 2013 at 1:25am
Don't recall the occurrence myself BPW .
Who applied for the force pooling order ?
Must have been another O & G ?
An O & G force pooling another O & G's leasehold might not be so bad as I would believe the landowner's lease with the force pooled O & G would be maintained and prevail insofar as the landowner's deal was concerned - correct ? ?
It's the unleased landowner getting force pooled into a bad deal that worries us.
Permalink Reply by Billy Park Whyde on December 19, 2013 at 1:35am

Tat was exactly the train of thought in that thread.

Permalink Reply by Joseph-Ohio on December 19, 2013 at 1:38am
Wonder if I commented on that one ? ?
My 1st lol - at myself too ! !
Permalink Reply by Jim Litwinowicz on December 19, 2013 at 2:46am

You guys are missing the point of the issue. When one is under an old lease and a company wants to put you into a larger unit than permitted by the lease, this is an opportunity to get a better lease. Perhaps one that pays better royalty or has better surface restrictions to protect the land. If a company can force pool an existing lease, the power to re-negotiate goes away.

Permalink Reply by Joseph-Ohio on December 19, 2013 at 2:58am
How is it possible ?
The 1st lease is the landowner's contract.
The 1st lessee would have to release the landowner or somehow break the 1st lease.
The landowner is bound as any lessee is also bound the way I understand these things.
Correct or not ? ?
Permalink Reply by Jim Litwinowicz on December 19, 2013 at 3:45am

If they can force pool you when you have no lease at all, they are forcing you into a contract....one that you may not agree with or like. If they can force you into a contract that you do not like, then can they force you to accept changes that you do not like in an existing contract? That is the basic question of the original post.

Permalink Reply by Joseph-Ohio on December 19, 2013 at 4:01am
I get your drift now.
If the ODNR's Oil & Gas Division Chief decides it's 'just and reasonable' to force you out of your 1st lease (which you as a landowner / lessor decided was good enough for you to enter) and into a new (force pooled) unit that he / she has decided to also be 'just and reasonable' (but perhaps you would not) - what would stop the occurrence ? ?
Court(s) / litigation ? ?
That's another perspective that bears out how bad Ohio 1509.27 really is if you ask me - how about you now ? ?

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service