Pooling and Community Leases: Problems and Options for Executive Owner, Non-Executive Owner, Lessee

September 01, 1997

Introduction

To understand the problems and options available to the executive and nonexecutive owner and to the lessee with respect to pooling, we must first examine the nature of the nonexecutive interest. This paper will focus primarily on pooling of the nonexecutive interest as it represents an interest in gross production. We must then understand the duty owed by the holder of the exclusive leasing right to the owner of a nonparticipating royalty interest, particularly as it relates to pooling and unitization. Then, an analysis of the cases that develop and apply this duty in the pooling context will permit us to take a practical look at the options available to the owner of the executive rights, the nonparticipating royalty owner and the lessee when lands subject to a nonparticipating royalty interest are pooled with other lands.

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