Possible force pooling , maybe

My friend in Noble county has a delimma, A company wants to sign a lease with her because they have a unit about completed and shes almost in the middle of it. She's thinking she may be better off to make them force pool her land. Their offering close to 6000 to lease but she thinks she may be better to hold off and become a part owner in the well when they drill. Isn't it after they recoup 200 percent of the cost of drilling then she will receive he money. I told her how would you ever know when that is and in the long run would you make any more money.. About forgot she owns 2 acres. Any opinions would be appreciated because she's an older woman that doesn't know what to do.. Thanks

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Permalink Reply by Joseph-Ohio on December 14, 2013 at 1:42am
Thanks for your post Philip.

1509.27 - a beautiful example of the use of the run-on sentence to confuse any reader into a half-conscious stupor.

After reading it I discover that my mouth is open, I'm taking shallow breaths through my nose, I'm bleary-eyed and seem to have forgotten how to blink. The best way to recover to normal consciousness that I've found is to shake my head and run in place for maybe 60 seconds.
Permalink Reply by Anastasia on December 17, 2013 at 4:12am

Why would anybody volunteer to pay bills on a well?  Even after drilling, the expenses are tremendous. 

Permalink Reply by Joseph-Ohio on December 17, 2013 at 4:25am
That's one of the main reasons to complain / petition for change.
The way I understand how things may turn out for someone whose lands are force pooled, they may have to pay (if the Oil and Gas Division Chief thinks it's just and reasonable for the landowner
to be required to pay).
Permalink Reply by Suzan on December 17, 2013 at 4:13am

She should be able to get a great lease and royalty percentage as that would save all of the gas and oil companies involved in the production unit from paying attorneys to file the application. And the permit can be filed sooner without the forced pooling application and approval hold up. The sooner they drill and start production the sooner her royalties will come in.  All depends on why she hasn't signed in the first place I guess. 

Permalink Reply by Joseph-Ohio on December 17, 2013 at 4:31am
Maybe the lease being offered requires payments of a sort that the landowner doesn't want to be liable to pay ?
Don't know how bad the lease being offered is, do we ? ?
Permalink Reply by Darrel Munsey on December 19, 2013 at 5:57am

I have been a landman for over 30 years....this was fun at one time, now we have greedy people with their hand out every time you make a phone call...bonus is not enough, royalty too low.   Like they could drill their own well?   Just this week, after working with a mineral owner for over 8 months on a NPRI she obtained from  the father...finally signed, now they are looking for the DO...They wanted to know if anyone has been paid yet?  Yes, and I informed them that a couple months ago, someone with a similar interest in the Well received a check for $64K...They replied...OMG.....I shook my head and said to my self....hey...this is what I have been trying to tell you for the past year....free money...lots of it...just waiting on your signature....just saying and venting....

Permalink Reply by Richard Droske on December 19, 2013 at 5:59am

Get a lawyer who specializes in gas leases. Crazy to do or sign anything without one.

Permalink Reply by Joseph-Ohio on December 19, 2013 at 6:15am
Goes without saying Richard.
Permalink Reply by JD Stillwater on December 19, 2013 at 10:41am

I am not an attorney and don't know the laws, but my guess is that the order to force pool has to come through some sort of state board or court. I would expect that that board or court would want to see that the company had "no other choice" but to seek a force-pool order.  If I'm right, then as long as she's making counter-offers that are reasonable ($12,000/acre bonus; 30% royalty; no surface rights) and she's bargaining in good faith, then force-pooling will not be an option for the company.  Bottom line: She needs an attorney. 

Permalink Reply by Paul Rote on December 22, 2013 at 12:50pm
A wise man told me "a working man should not a working interest own". This women would be better served to lease her minerals for the immediate cash and a 25 % royalty rather than waiting for a 200% payout which may be years down the road if ever. Last thing she needs is to handle AFE's which will be incomprehensible and require cash outflows. $6000 an acre bonus is certainly not a lowball offer anywhere in the country. Take the money and run, it may not come around again. Thank your good fortune.
Permalink Reply by Grant Townsend on December 23, 2013 at 3:00pm
They will not force pool her, they will force unitize her. The court will force her to take a "reasonable lease". It will likely be close to but less than an average of the leases signed around her.
Permalink Reply by Joseph-Ohio on December 23, 2013 at 3:17pm
Grant,
What is the difference between being 'force pooled' and 'force unitized' ?
Similarly can you school me on the difference between a 'production unit' and a ,drilling unit' ?
I have a lot of of difficulty with semantics.
J-O

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