Saturday, August 1, 2009
With Cherokee Horns recent push to get people to sign, many have been asking about what happens in a "Forced Pool" situation. Well here it is right from Cherokee Horn's website.
It says that those who do not initially sign would not get the bonus but receive the 20% royalty. After drilling costs were recouped and well was producing, the forced pooled lots would get 100% royalties while the signers still got their 20%. It almost seems too unreal but I have read legal blogs too and they all say the same. So it seems not signing is a better deal and the best protection for our homes no matter what. Why? Because of our O & G ordinance, we still get to fight for the distance of 1000' or with variance of 500'. The signers automatically give permission for 500' or 300' with a variance.
"An exception to this would be if a homeowner’s unsigned lot were absolutely crucial and the company had to include it. A scenario such as this would exist if the company could only access the rest of their mineral pool by going through a particular unleased interest. In that particular case, the gas company could appeal to the Texas Railroad Commission to have the needed parcel included in their pooling unit. This is called forced pooling.
In such instances, once production is established the owner(s) that were “forced pooled” would receive a 20% royalty payment, but no bonus. Once the gas company has recouped 100% of their well costs, then the mineral owner(s) would come in for their full interest. This means the royalty goes from 20% to 100%. "
at 11:04 AM