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Oil/Gas/No lease notification. Thrown in the pool.

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Question
My family has a 25 acre royalty interest in Payne County. We just recently found out that the property was leased and drilled a producing well. When I asked the leasing company why we were not notified and they said there was error in the title opinion and offered us the same deal as the royalty owners that were pooled. Do I have any options other than taking that of the pooled owners?

Answer
If in fact you weren't offered a lease, and were not listed on the forced-pooling application or order, then they are technically "trespassing" on your minerals. This does give you some bargaining power but if you push too hard they likely will just apply for a "corrected" forced-pooling order to include you (and can probably get it.)

I'd suggest you ask them to pay you a 1/8 royalty and "carry you" until the well "pays out" (they recover their drilling costs) and then let you come back in to the well as a working interest owner (which could be a substantially better payout than just leasing would have brought you.)

I would also strongly suggest you talk to an OIL AND GAS attorney about this and have him/her run over your options with you in detail because whatever you decide can affect your rights for years to come if the well produces for a long time.

Jack Ivester (http://www.ivesterlaw.com/) in Elk City or Sayre, OK is experienced with this sort of thing, as is Mathew McBee (http://www.mcbeelaw.com/) There are probably attorneys in Payne County who are familiar with oil and gas as well but I don't know any personally.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub  

Oil/Gas

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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