Anonymous wrote:
As owner of minerals in Colorado (minerals only - no surface ownership) , I have a number of offers for Oil and Gas Lease but none acceptable thus far. Negotiations have been ongoing over the last couple of years, all to no avail. (We are still at the stage of haggling over bonus, royalty, and terms for addendum, etc.) Recently, after turning down offer that had been reduced I received the following "comment" from landman.
" . . . keep in mind as interations of fair offers and negotiations continuously break down; the ultimate result is force pooling; whereby the mineral owner forgoes his rights until pay out plus a penalty. I can't force pool you because I don't own the outstanding interest, but somebody else could if they get fustrated."
Such a statement seems highly inappropriate and not very inspirational to continue further negotiations. That said, in regard to "force pooling" in Colorado can anyone address:
- Who can force pool mineral owner? Oil company? Surface Owner? Other Mineral Owners? All?
- Specifics as to consequences for Mineral Owner
- Associated costs (if any)
- At what stage can a Mineral Owner actually be force pooled?
- Does this happen very often?
- Is force pooling a viable option if terms cannot be agreed?
Any comments or guidance on this subject in Colorado will be greatly appreciated.
Thanks,
Mineral Owner
There is a force pooling statute in Colorado.
It requires that a hearing be held in front of the Colorado Oil and Gas Conservation Commission. (COGCC) There is a considerable amount of due process involved before the hearing takes place. Lease negotiations must have been conducted to impasse, a fair market value lease has to have been offered. A request for a hearing to pool non consenting mineral owners be made, and notice to all parties of the hearing be made according to statute. There is quite a bit more to this, but this link to the statute will be the best way for mineral owners to educate themselves.
After reading the statute the next step is to go to the COGCC Website http://cogcc.state.co.us/ and read the hearing rules. The headings on the left of its home page are self explanatory.
Neil
