Showing posts from May, 2015

Arkansas Supreme Court Rules that Mineral Integration Process is Constitutional

Oil and gas operators attempt to secure the right to drill for minerals by obtaining leases from mineral owners.  Not all owners affirmatively agree to lease, either because they disagree with drilling near their property, or because they want better terms.  If lease negotiations are frustrated, an oil and gas operator in Arkansas can seek an administrative order from the Arkansas Oil and Gas Commission that force pools, or integrates, the non-consenting mineral owner's interest, which will then allow an operator to proceed with drilling.  In other words, a mineral owner cannot hold out forever.  Non-consenting mineral owners that become integrated by order of the Arkansas Oil and Gas Commission are then afforded compensation options, ranging from leasing on terms set by the Commission, becoming a "non-consent" owner, or participating in the costs (and benefits) of the drilling of the well.   Each option has its own risks and rewards. In Gawenis v. Arkansas Oil and Gas