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Bill to provide protections for mineral rights owners in ‘forced pooling’

Posted: 6:27 PM, May 21, 2018
Updated: 2018-05-21 20:27:53-04

This legislative session, lawmakers agreed to some changes when it comes to pooling statutes for mineral rights owners in Colorado. 

‘Forced Pooling’ is a process in which mineral rights owners could be subject to drilling on their property- even if they don’t want to sell. 

In Colorado- Oil and Gas companies only need approval from one owner in the area to be able to enter a ‘forced pooling’ notice. 

This is as long as the company makes an offer deemed reasonable and one owner signs a lease. 

‘It [pooling] ensures that if you have multiple mineral owners in the same area, and the vast majority of those mineral owners want to develop and one doesn’t that that 1, cannot impede the other owners from developing their property right or their mineral owner,’ according to Colorado Petroleum Council Director Tracee Bentley. 

Forced pooling allows the company to take the mineral rights of all the other owners and put them in a single unit and then they lease the rights, regardless if the owner wants to lease them. 

In some cases, the oil and gas companies give low offers to mineral rights owners to lease those rights. 

The company gets an order through the state, from there the company gives a notice to other mineral rights owners letting them know about a pooling hearing. 

A bill passed in this legislative session will give protections to mineral rights owners who find themselves in this position. 

‘We’ve had the same pooling statute on record in Colorado y since I want to say the ’80’s, probably even before, so there was a need to update it,’ said Bentley. 

Under the bill, Oil & Gas companies will have to give 60 days notice instead of the current 35 days for a pooling hearing. 

Additionally, the bill will also require any pooling notice letters to have simple language and a brochure explaining the rights owners have in this situation. 

In the 2017 legislation, a bill tried to increase the notice days to 90- that bill did not make it through the legislature.