Is Forced Pooling being used to get around old gas lease limitations?

http://oilandgas.ohiodnr.gov/portals/oilgas/pdf/unitization/2014/Gr...

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Permalink Reply by Philip Brutz on August 2, 2014 at 1:11pm

Joseph, what if the landowner that does not want to be drilled owns over 1000 acres and you own 10 acres next to them?  Raven Rocks owns over 1000 acres in southern Belmont county and does not want to lease their land.  Their  choice affects  smaller adjacent landowners.  You would find this thread very interesting:  http://gomarcellusshale.com/forum/topics/antero-5700-at-20-signing-...

Permalink Reply by Dexter Green on August 2, 2014 at 4:17pm

"A landowner quorum vote instead, similar to congress."

NOOOOOOOOOOO!!!!!!!  Never subject landowners to anything similar to Congress ; )

Permalink Reply by Joseph-Ohio on August 3, 2014 at 1:36am

Pretty hard for me to understand why Raven Rocks owning over 1000 acres wouldn't want to cooperate and agree to perhaps a non-surface disruption sort of a lease.

Sounds like an anti-frac / environmentalist driven kind of a behavior to me (but don't know of course).

So if they (somehow) ended up getting force pooled / force unitized anyway all they've really accomplished is losing a signing bonus (probably a bundle for over 1000 acres) and perhaps not even earning a royalty for their minerals (if the recovery dollars (perhaps the 300% penalty)and perhaps market enhancement charges outweigh production (don't know how likely that is but it seems to me a possibility)).

Force Pooling / Force Unitization in this instance however seems like it would benefit the smaller adjacent landowners desiring development - but that's not the purpose of the rules in reality is it ?

Maybe in this instance eminent domain rules would be most appropriately applied to the gas and oil, with the landowner being compensated for the wholesale value of the gas and oil by the state and the state reimbursed by the gas and oil developer while the adjacent landowners would be given the opportunity to lease and develop or join the Ravens Rock deal - their option.

Kind of a hybridization option here may be most fair to all concerned parties.

Just an idea / thinking outside the box (aloud here as I write).

Permalink Reply by Philip Brutz on August 1, 2014 at 1:10am

This does show that they are willing to pay competitive bonuses and royalties to fix problems with old leases.  landowners with old leases should holdout and not sign addendums for a few hundred dollars. 

Permalink Reply by Philip Brutz on August 2, 2014 at 2:32pm

Raven Rocks are environmentalist that do not want any drilling on their land and are too large to be force pooled in their entirety.  They would be a drilling unit all by them selves. If you own a small amount of land adjacent to them you may not be able to be in a drilling unit.

Permalink Reply by Joseph-Ohio on August 3, 2014 at 3:15am

That being if they were offered and they accepted a lease to develop which reads to be unlikely judging from what you've written about them.

Permalink Reply by Philip Brutz on August 2, 2014 at 3:18pm

Joseph, you are willing to have "eminent domain" but not forced pooling?  Raven Rocks does not want or need any money.  They do not want drilling under their land.

Permalink Reply by Philip Brutz on August 2, 2014 at 3:40pm

Joseph, how would your "weighted landowner vote" work in the Raven Rocks area?

Permalink Reply by Joseph-Ohio on August 2, 2014 at 4:20pm
If a Force Pooled / Force Unitized arrangement including all Raven Rocks and any adjacent smaller parcels isn't workable from the developer'standpoint the developer wouldn't make application in that manner would they ?

The 'weighted landowner vote' would not serve to make the resources available for recovery since Raven Rocks would vote to not develop.

In either of those 2 scenarios it would appear to me that neither Raven Rocks nor the developer are seeking the resources to be recovered.

It would appear to me in this instance that it would be only the state and the smaller adjacent parcel landowners desiring development.
Permalink Reply by Joseph-Ohio on August 2, 2014 at 4:55pm
The state can't force a developer to recover the resources if they don't want to.

The smaller adjacent parcel landowners can't force a developer to recover the resources either.

As I understand it, in instances of Eminent Domain the state can sieze valuables that they want for the greater public good and pay fair market value for them. But if they didn't want to they wouldn't be obliged to sieze resources from the smaller adjacent parcels either.

I wonder if the state could hire a developer to recover the resources and if it ever has ? Does anyone know ? I've never heard or read anything like that happening - has anyone else ? Of course there's been leasing and developments on state lands that I've heard / read about but never the hiring of a developer that I know of.
Permalink Reply by Joseph-Ohio on August 2, 2014 at 4:01pm
As I understand Eminent Domain pays fair market value for seized valuables, whereas Forced Pooling / Forced Unitization pending panalty dollars may not.

Also only in certain hybrid instances like Raven Rocks discussed above.

I don't believe the one size fits all Forced Pooling / Forced Unitization works in considering all involved parties corelative rights in all instances.

Only IMHO as always.
Permalink Reply by Joseph-Ohio on August 2, 2014 at 11:51pm

Also, to me, Force Pooling / Force Unitization is a State sanctioned siezure of privately owned valuable consideration; and if executed, involved landowners should be compensated for the loss of their right to lease / not to lease / to develop / not to develop / to sell / not to sell their privately owned resources resident within their privately owned lands.

Force Pooling / Force Unitization looks to me to be an Eminent Domain seizure of valuable consideration, just applied under a different name / alias.

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