People who own mineral rights in Oklahoma are often faced with decisions about their land. One of these is how land should be developed, but this doesn’t always depend only on a single mineral rights owner.
The Oklahoma Corporation Commission has the option of issuing an order that brings together the interests of multiple owners within a specific drilling area. This enables drilling in the area to move forward even if all the landowners in the target area don’t consent. This doesn’t erase ownership rights. Instead, it prevents an unresolved interest from stopping development across the entire area.
How does forced pooling work?
Forced pooling usually begins after a company tries to reach a voluntary agreement with the owners in the target area. If some owners are willing to sign but others are skeptical about the agreement, the company can ask the Commission for a pooling order.
The pooling order can set available options for those who didn’t sign the agreement. This can include things like royalties and cash bonuses. It also discusses alternative royalty structures and participation in the costs of drilling.
The process has strict deadlines, so owners only have a limited time to respond when they receive notice of the pooling. If an owner doesn’t respond, it will be treated as if they accepted the default option.
Forced pooling is often misunderstood, but it’s a state-authorized regulatory tool that all mineral rights owners should review. Anyone who’s approached with a lease proposal or forced pooling order should ensure they work with someone familiar with these matters so they can ensure they understand their rights and responsibilities.