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Oil/Gas/non-leased property in a producing area

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Hello, Mr. Scott –

I hope your vacation was a good one.

Question:  Are non-leased properties in a forced-pool grouping entitled to any revenues? If so, how is an inquiry made and to whom?

My mother, age 84, did not participate in leasing her property when Twin Cities Development, the leasing agent for Chesapeake Energy, began to offer lease options in her area of the Haynesville Shale deposits back in 2008.  She lived alone and did not understand the paperwork sent to her and felt apprehensive about the leasing process.  We chose not to pursue it due to her concerns and the fact that the property is not a large tract of land.  The un-leased properties were “force pooled” prior to the installation of the natural gas well. We had accepted the fact that since she did not lease, she was not entitled to any revenues, but have since been told by two different acquaintances that she should be entitled to something from the well in her block once the well had "paid for itself several times over."  With her modest retirement and current expenses, anything would be of help.  So, curiosity led me to begin looking into it and that is when I found and read some of the helpful information that you have given to other people.

Documents sent to her during the 2008-2010 period give the following information:

Her acreage is in Section 15, Township 17, Range 15 of the Haynesville Zone, Reservoir A in the Greenwood-Waskom Field, Caddo Parish, Louisiana   
Another document entitled Pre-Application Conference from 2010 lists this information:  Haynesville Zone, Reservoir A  
S 21 22 23 T17N R15W
(HA RA SU 76, 77, 78)

Please let me know if I can locate any further information that you might need.  I thank you so much for any guidance you might provide.

Answer
My feeling is that she certainly would be due any "default bonus" included in the pooling order. The "default" bonus is the bonus assigned to the mineral owner in the event they do not respond and make their own election under the pooling order. The company who did the pooling would be the company to contact to see what happened to this money. If it wasn't paid, they should have placed it in a "suspense account" until payment can be made.

I'm not sure about Louisiana, but in Oklahoma and several other states that have forced pooling statutes the mineral owner who is force pooled is entitled to royalty payments immediately, rather than after the well has "paid for itself several times over" as you mentioned. That would be more for someone who decided to participate in the well but did not pay their costs up front...in essence forcing the operator to "carry them"; which is where the "several times over" penalty would apply. I don't think this is the case with your mother though.

I would contact either the operator or the company who forced-pooled the section and explain your questions to them as well. They should be able to tell you how to claim any money they should have paid (or should be paying) your mother. In many states, unpaid bonus money and late royalty money are subject to statutory interest payments as well (in other words, they might owe your mother interest on any payments that have been withheld.)

If that doesn't resolve things to your satisfaction contact an OIL AND GAS attorney in Louisiana who can explain what rights (if any) your mother has to these funds. A Louisiana oil and gas attorney could advise you much better than I as to this issue I'm sure.

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