5 Quick Facts about Oklahoma Pooling
Having your minerals pooled into a drilling unit in Oklahoma is very common and is becoming increasingly more and more common, especially for smaller tracts of lands. Here are five quick facts about pooling in Oklahoma.
In lieu of a lease
Pooling is the operating company’s remedy for obtaining the acreage needed to form a drilling unit when not all the acreage required is leased. This includes owners who cannot be located, owners whom a lease agreement cannot be negotiated, and small tracts.
Every Pooling Order gives the unleased mineral owners an opportunity to lease. It may not always be the best rate and there is no opportunity to negotiate other provisions you might like your lease to have, but generally, the mineral owner is given a few different royalty and bonus options to choose from or the option to participate.
Participating means you are agreeing to use your acreage and proportionate share of the unit to contribute as a working interest owner. This means you will share in the expenses, burdens and liabilities of the drilling and production. The upside to a working interest is the full share in the profits if the well is successful.
If you receive a pooling order, open and read it immediately! Most pooling orders give the mineral owner 20 to 30 days from the date of the order to make an election. Keep in mind the pooling order has been traveling by mail and the window for election will not be 20 days by the time it reaches your doorstep. If a written election is not made within the allotted time period, an election will be made for you, which may not be the option that best maximizes the value of your interest.
At least you’ll get pooled
Forced pooling is not the most terrible thing if you consider what can happen in other states. In some states you can be cut out of the unit altogether if a lease can’t be negotiated. At least in Oklahoma you can count on getting pooled if negotiations break down between you and the lessee.