identified causes of action to recover the oil and/or gas wrongfully commingled by the Commingler. 1. Example A: Production of oil and/or gas is from one or more lease wells on a single lease where the working interest is owned in undivided interests and all production is produced into a common tank battery or sold to a common purchaser. Metering of each well is not usually required in this situation since each working interest owner will be able to determine its undivided lease working interest based on accurate title examination and thus define it aliquot share of production from all lease wells going into the common facility. There is no issue of commingling under this fact scenario.
production is attributable to each separate lease/well.
Once commingling of the oil and gas has been established, the common working interest owner has the burden of showing how much of the production is attributable to each well/lease.
3. Example C: Example B is to be distinguished from the situation where a validly pooled unit has been formed but not all mineral/royalty owners have been effectively pooled. a. Where vertical wells are involved, if the well is not on the un-pooled/un-leased mineral or royalty owner’s tract of land, such mineral or royalty owner does not share in any of the unit production; and b. Where the vertical well is on the un-pooled/ un-leased mineral or royalty owner’s tract of land, and that production has been commingled with production from other wells located on the unit area, the working interest owner has the burden of proving how much production is attributable to the well located on the un-pooled/un-leased mineral or royalty owner’s tract of land. If demonstrable with reasonable certainty, thereafter the un-pooled/ un-leased mineral or royalty owner thereafter takes its share of that tract’s production on an un-pooled/un-leased basis. If the working interest owner cannot demonstrate what share of production is attributable to the well under which a mineral/royalty owner’s interest is not validly pooled, such mineral/royalty owner may be entitled to its share of all unit production from all unit wells. 4. Example D – The operator of an adjoining lease/ unit a. Unlawfully trespasses on another lease/unit and drills one or more unauthorized wells; and b. Produces that well(s) through its metering facilities/tank facilities; and
2. Example B: Oil and/or gas production:
a. From two or more vertical wells on two separate and distinct oil and gas leases; and b. Ownership of the mineral/royalty interest is different under each lease; and c. The working interest in each lease is vested in the same oil company; and d. The production from both wells is produced into a common tank battery or sold to a common gas purchaser utilizing only one common metering device. e. This factual situation does not involve the pooling of the separate leases. The ownership question is what portion of the oil and/or gas stream is attributable to each well/lease where only one common metering device has been utilized. This factual situation often arises where the same operator produces all of the wells from all of its separate leases and does not meter each well separately coupled with different mineral/royalty ownership under one or more separate leases. The question of ownership centers on what amount of
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G r o w t h T h r o u g h E d u c a t i o n - J u l y / A u g u s t / S e p t e m b e r 2 0 2 0
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