forced pooling in ohio

This is for all you'ns that are holding out for mo money, or just plain old dont want to lease your mineral rights. making it almost impossible for all your neighbors to ever get into a drilling unit and cash in on their minerals.  Not only can they force you in,but they can just go around you. Some of the maps of drilling units are not rectangles,but wierd shapes,just for that reason. Some drilling units are spaced apart a ways,with you people, left out! 

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Permalink Reply by Joseph-Ohio on March 16, 2013 at 11:26pm

Can you please explain how including a landowner in a drilling unit without offering / paying said landowner a signing bonus (if the other landowner's were paid a signing bonus) can be interpretted as "....protecting each owner's correlative rights." ?

Perhaps the other landowner's were not offered a signing bonus either ?

Perhaps they were / are HBP ?

Perhaps the agrieved landowner terminated an old lease due to non-performance (no well / development after his / her lease came to term) ?

It seems to me that many circumstances could have caused this situation to occur.

We would like to know more.

Permalink Reply by bo boboski on March 17, 2013 at 1:20am

type in;  The Daily Digger.  carroll county's oil&gas web site.  they are on top of it, as much as anyone . I dont think that  the landowner is due a signing bonus in this case according to law, but they will get paid someday,only WAY down the road! Probably after the well is depleted a good deal. I"ve read the ohio forced pooling law, but cant remember where I seen it. maybe ODNR. With all the requirements to get it done, I didnt think it would ever be used much. Sometimes it may not be possible to go around a holdout,or leave them out. Dont know why someone would want to live their life with all their neighbors hating them  anyway.

015334grltd9mPermalink Reply by 015334grltd9m on March 17, 2013 at 2:15am

Here's the big one my friend and thanks for bringing this up, this is where those of us who have not leased everything will prevail:

"Evidence presented by CHK established that a fair offer, including signing bonus, was already extended to the unleased owners."

So those of you who have not been offered, when they come your way and they will, if you have the minerals, my theory has always been the highest offers will be in the market at that time.

Permalink Reply by wyalusing jim on March 17, 2013 at 2:38am

"So those of you who have not been offered, when they come your way and they will, if you have the minerals, my theory has always been the highest offers will be in the market at that time."

i sincerely hope that you arent  offering bad advice and false hope there, to some.

there are reasons why some landowners might never receive "high" offers.

still more reasons why later offers may not be as high as earlier ones.

many landowners here in pa have been undone by thinking this and similar ideas.

some now sit unleased, inside of producing units, receiving nothing, because they decided not to lease when they were previously offered good terms. it's a shame.

wj

015334grltd9mPermalink Reply by 015334grltd9m on March 17, 2013 at 2:52am

Jim, slow down brother, I am speaking of those who have NOT been offered.  Nowhere have I advised not to take offers.

Permalink Reply by wyalusing jim on March 17, 2013 at 2:54am

gotya.

it was that reference to "highest offers" in your post i think that threw me off.

wj

Permalink Reply by Kathleen on March 17, 2013 at 2:59am
Am I missing something every time I read this law?
I get that they did not receive a sign on bonus but the long version of this law states the oil/gas co had to show they did offer a fair bonus and how many times and what the outcome was each time.
So if someone still says no after being offered fair bonuses and its hurting everyone around them why should the ODNR than say they still have to offer a bonus.
No where in the law does it say once it gets to this point a bonus has to be given.
These people will get 1/8th royalty than a working interest after all production costs as stated above (I feel for them since its a CHK well though on this issue.
Yes 1/8th stinks but I bet they were offered more.
I just do not see the confusion on this anymore. They had to follow the written law.
Permalink Reply by paleface on March 17, 2013 at 3:12am

 After the well has payed for itself the working interest could pay more than the leased royalty's would pay.

Permalink Reply by wyalusing jim on March 17, 2013 at 3:17am

" After the well has payed for itself the working interest could pay more than the leased royalty's would pay."

BINGO!

and working interests dont get bonuses for just that reason. they normally pay upfront for their working interest.

in fact, this looks like a very sweet deal indeed because he gets a 1/8 royalty until the well pays off 150%, and then still receives that 1/8 plus the 7/8 at 100% i presume.

i'd take that deal in a heartbeat.

wj

Permalink Reply by paleface on March 17, 2013 at 3:26am

 And the larger his or her track of land is in the unit  makes it stronger financially for him or her.

015334grltd9mPermalink Reply by 015334grltd9m on March 17, 2013 at 3:13am

Most of the landowners left have not been offered, this I can assume.  So when a unit is being formed in the next phase, the energy company must make the landowner an offer and if I recall corectly, it must be an offer identical to your neighbors or better.  If at that time you refuse, they can force pool you in Ohio, IMHO.

Now this leads me to Hilcorp, they reduced their offers in Ohio from $5K to $4K, I.........believe, that they did not take into account the force pool laws of Ohio and when they retry to lease after someone refused $4K, I can hear the judge say "why did you offer them less than their neighbors?"

Another thing, I believe that because of Ohio's force pool law, Hilcorp and the others will make a new thrust to lease all needed parcels in planned units.  Because reducing their price will give fodder for those who will need to be forced pooled. 

Permalink Reply by wyalusing jim on March 17, 2013 at 3:34am

you're not getting hung up on bonus figures are you?

in a good shale well, which i assume is the case out there in ohio, the bonus aint spit compared to the royalties.

dont get me wrong, bonus checks are real nice, but i'd give up thousands in bonus to get a couple more points in R%.

all ya gotta do is run the numbers on these wells to see if that is true.

i've always been of the opinion that the bonus is just the carrot that they dangle to take your eyes off of the real prize.

wj

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