Energy Industry (Oil & Gas)/Request to Ratification for NPRI


QUESTION: I just recently found out that I am an NPRI for acreage in Howard County Tx. The Oil Gas Company sent me a ratification form to sign. They want to pool leases. He stated that they are drilling a horizontal well under the property that hold my interest. Does this mean that I am part of the drill site tract?

ANSWER: Theresa, yes the ratification request does indicate that your royalty tract is going to be included in a pooled unit.  Pooling the royalty interest of a royalty interest owner like yourself cannot be done without the owner's consent, and that is where the ratification comes in.  You will be ratifying the lease and its terms, particularly its pooling provisions.

Good luck Theresa and let me know if you have any other questions.

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QUESTION: If I do not sign the ratification form am I entitled to my full royalty (undiluted)?

Theresa, I can't give you a certain answer without knowing more facts. As a general rule, however, if your royalty is in a non-drill site tract, and you don't ratify, you are not entitled to any unit production. If the will is a vertical well and is located on your tract, then your royalty share will not be diluted if you don't ratify. Regarding the latter situation, keep in mind that you will not share in production from any unit well that is not located on your tract,

If a horizontal wellbore crosses your tract in the productive interval, and you don't ratify, you won't be diluted by the pooling.  Your royalty will be reduced, however, to reflect that not all of the unit production will be coming from your tract. A rough and easy example:  if 500 feet of the horizontal wellbore crosses your property, and the horizontal wellbore is 4,000 feet, your royalty fraction would be 12.50% X your royalty share.

I think it's often better to ratify the lease than not, but it just depends on the situation.  

Good luck Theresa and let me know if you have any further questions.  

Energy Industry (Oil & Gas)

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David B. McCall


Questions regarding oil and gas exploration and production, the operation and management of oil and gas producing properties, and questions related to mineral ownership, title problems, and oil and gas leases.


I am Board Certified in Oil, Gas and Mineral Law in the state of Texas. I have more than 37 years of experience in the industry as both an in house attorney for major oil companies and as a partner in oil and gas firms. I am also a mineral owner and receive royalties from oil and gas production. I have extensive title examination experience, and have represented clients in many administrative and court proceedings.

State Bar of Texas, Texas Bar Foundation, and Austin Bar Foundation.

Various state bar seminars on Oil and Gas matters.

I have a business degree in marketing from McMurry University, 1971, and a JD degree from Texas Tech University in 1974, where I graduated 17th in my class. Board Certified in Oil, Gas and Mineral Law in 1986.

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