Louisiana forced pooling

The question with wide-ranging implications for Louisiana operators and mineral owners in Johnson et al. v. Chesapeake Louisiana LP et al is whether unleased mineral owners in a drilling unit established by the Commissioner of Conservation must bear their proportionate share of post-production costs.

The statutory scheme

Under Louisiana’s forced pooling statutes, the Commissioner may form drilling units and appoint an operator to drill and operate wells for all owners in the unit. Unleased mineral owners (the court called them UMO’s) are exempt from the statutory 200% risk charge for drilling costs applied to non-participating lessees. The operator is required by La. R.S 30:10(A)(3) to pay a UMO who has not elected to market his share of production the tract’s pro rata share of proceeds from the sale of hydrocarbons.

The claims and defenses
Continue Reading Louisiana Unit Operators May Deduct Post-Production Costs from Unleased Mineral Owners

Gregg AllmanTrigger warning for Texas readers: This entry will discuss forced pooling. You may now retreat to your “safe space”, where “no guvment-sumbitch-bureaucrat can conspire with [name of large oil company] to steal my stripper well.”

TDX Energy, L.L.C. v. Chesapeake Operating, Inc. doubles down on XXI Oil and Gas v. Hilcorp Energy Company from the Louisiana Third Circuit, while giving a useful tutorial on the purpose and effect of Louisiana forced pooling. Caveat: Pay attention below to the statute as amended.
Continue Reading Louisiana Forced Pooling – Timing is Important