What Forced Pooling Means to You
Forced pooling in Oklahoma, also referred to as compulsory pooling, statutory pooling, or mandatory pooling, is a legal process that can have significant implications for landowners. When faced with the prospect of being compelled to participate in a drilling unit against their wishes, it becomes essential to seek professional legal counsel. That’s where Jay Bills, an experienced Oklahoma Land Services Attorney, comes in.
Understanding Forced Pooling in Oklahoma
In Oklahoma, the Corporation Commission is authorized by state statutes to create drilling and spacing units. These units are designed to prevent waste and protect the rights of all interested parties. If a majority of the parties within a drilling and spacing unit express the desire to drill a well and extract oil and gas, reluctant parties cannot impede their progress. This is where forced pooling comes into play.
When an energy company fails to reach an agreement with a mineral owner, typically through an oil and gas lease negotiation, they can file a pooling application with the Oklahoma Corporation Commission. This application seeks to pool the interests of the party in question with the other owners, enabling the drilling project to proceed.
Your Options and the Pooling Process
If you find yourself subject to an oil and gas pooling application in Oklahoma, it’s crucial to be aware of your options and the steps involved in the pooling process. The proposed operator will conduct a comprehensive search of county records and other sources to identify all parties with drilling rights and their correct addresses. The application to pool is then filed with the Office of Administrative Proceedings (OAP), naming owners who have not leased their interests as respondents.
Notice is provided to the respondents through mail and publication, informing them about the hearing’s time, place, purpose, and the requested pooled formation. At the hearing, all individuals with drilling rights can attend and express their interests. An Administrative Law Judge (ALJ) oversees the proceedings to ensure proper notice was given and assesses the applicant’s good-faith effort to negotiate before filing the pooling application.
Determining Fair Market Value and the Pooling Order
During the hearing, testimony is presented to establish the costs associated with drilling and completing the well. The ALJ also examines the fair market value of the mineral interests in the unit, considering recent lease transactions in the unit and neighboring areas. While unleased mineral owners are entitled to retain the statutory one-eighth royalty, the fair market value often offers additional benefits.
Once the hearing concludes, the applicant prepares a Pooling Order, which undergoes review and signing by the ALJ and the full Commission. Copies of the order are then mailed to each respondent, granting them 20 days to either participate in the well or choose one of the fair market value alternatives. The Pooling Order contains various provisions, such as the establishment of an escrow account for owners with unknown addresses or title issues, rules for future wells, and a time limit of six months (with possible extensions for good cause) to drill the well.
Appeals and Seeking Legal Expertise From Your Oklahoma Landman
If any party objects to the pooling application, they have the opportunity to present their case at the hearing, and a report is subsequently issued, recommending whether the case should be granted or denied. This report can be appealed to the Referee, who provides a further report with recommendations. Ultimately, the full commission makes the final decision on whether to grant or deny the case. In cases where a Pooling Order is issued from a protested application, further appeals can be made to the Oklahoma Supreme Court.
Call Today For A Free Consultation
For the expertise and guidance you need when dealing with forced pooling matters or pooling orders in Oklahoma attorney Jay Bills, is here to help. Call 918-777-3914 today for a free consultation and let Oklahoma Oil and Gas Attorney Jay Bills protect your rights and navigate the complexities of forced pooling with confidence. Don’t navigate the complex legal process alone; get the expertise you need to secure what you deserve.