Tag: pool ORI

9Aug

Wyoming: Can Lessees Pool Overriding Royalty Interests?

There is a debate among Wyoming oil and gas attorneys, and I wanted to weigh in.  Some (maybe even many) Wyoming lawyers believe an overriding royalty interest simply cannot be pooled in Wyoming without the owner’s direct and express consent. Of course, this is only a debate in the context of voluntary pooling.  However, I believe this issue is, at best, unsettled.  I’d love to hear your thoughts in the comments below!

The Framework in Texas

Of course, Wyoming is not Texas.  However, many states look to Texas law for guidance in oil and gas issues, simply due to the vast number of reported oil and gas cases in Texas over the last 100 years. So how have Teas courts weighed in on this issue?

The General Rule

In Texas, the general rule is that a lessee has no power to pool any type of royalty interest without consent of the owner. [1]PYR Energy Corp. v. Samson Res. Co., 456 F. Supp. 2d 786, 791 (E.D. Tex. 2006) clarified 470 F. Supp. 2d 709 (E.D. Tex. 2007).  This would include overriding royalty interests as well. [2]Id. Therefore, in order to pool an overriding royalty interest, a working interest owner will need to either (1) obtain consent of the overriding royalty interest owner, or (2) fit into an exception to this general rule.

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Footnotes[+]

© Copyright 2012-2018, McGinnis Lochridge LLP. All Rights Reserved. DISCLAIMER: The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.
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