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Forced Pooled or Left Behind by Chesapeake – Barnett Shale

by Kenneth E. DuBose on August 26, 2011

Force pooling is often debated in practice, but you’re always better off to be forced pooled instead of left out completely. A family in Johnson County, TX, simply leased to a reputable operator (Devon Energy) and another reputable operator (Chesapeake Energy) leased more and put together a drilling unit adjacent to their property. When the Devon lease expired, Chesapeake chose not to attempt to lease the property.

The family is now surrounded on three sides by neighbors who leased to Chesapeake and has been left out of the drilling unit. All indications point to the family being left out of a producing unit, but they can still propose a lease and then take it to the Texas RRC to fight to be included. If you haven’t checked, lawyers are expensive and legals fees will wipe away most of any benefit of winning a long regulatory fight. A mineral owner has to be real confident that is good acreage to go fight for a little over 1 acre.

In principle, it doesn’t seem right, but oil & gas companies have never been forced to lease acreage in Texas.

Frankie and Bobby Tims have fallen through the cracks of the Barnett Shale.

Their Johnson County home of 39 years is in a hot spot for the Barnett’s 23-county natural gas play. They own mineral rights, but they can’t reap any financial benefit because the gas companies that are supposed to make that happen turned their backs.

Chesapeake Energy, which has drilling rights in their neighborhood, excluded their property from its production pool while including the neighbors on three sides of their lot. Devon Energy, which leased the Tims’ property in December 2005 when competition for leases was fierce, didn’t do anything to help them.

The people at the Texas Railroad Commission, who are supposed to regulate the oil and gas industries, say the gas companies hold all the cards.

Read the full news release at star-telegram.com

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