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Oil/Gas/Existing Lease and Forced Pooling

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Question
We have 320 acres in one section of which 160 is leased and has a low producing well in Oklahoma. The lease is for 3/16 royalty.

Our section was recently forced pooled in a 640 acre pool. We took the $500 an acre bonus and 1/5 royalty option.
A horizontal well was drilled but not completed before the pooling order was done. The pooling order has since been done by the OCC.

My first question is will we be paid bonus money for just the 160 that was not previously leased?
My second question is will we receive royalty only from the 160 that was not lease or will it also include the 160 that was held by production in the original lease.

Answer
The answer will depend in part on what the pooling order says and really, the whole chain of documents, offers, acceptances, elections, and so forth.  Usually the correspondence from the driller is pretty specific about what they think you own, your decimal interest, which would imply an answer to your question.  If you would like to fax the documents to me, I would be happy to take a look and tell you what I think.  My direct fax line is 877-355-3114.

From your description, it appears that they made an offer which you accepted and then perhaps the Corporation Commission blessed it with the pooling order.  I don't really know whether the previously leased section might have a release of non-producing zones or sometimes the Corporation Commission changes the unit spacing in its order, so I can't address that without more information.

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Mark Bonner

Expertise

Interests include oil and gas leases, mineral deeds, royalty payments, interest on late royalty payments, post-production costs.

Experience

I have been an attorney for over 20 years.

Organizations
Norman & Edem, PLLC 127 N.W. 10th St. Oklahoma City, OK 73103 405-272-0200 (Tel.)

Publications
Oklahoma Bar Journal; Oklahoma Association for Justice Advocate

Education/Credentials
Highest Honors, OU College of Law, 1992 Earl Sneed Award for Oil & Gas

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