Assignment Of Overriding Royalty Interest

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In other words, the general rule is not the ordinary case.

To the contrary, ORIs are almost always subject to the lessee’s power and authority to pool.

Of course, this is only a debate in the context of voluntary pooling.

However, I believe this issue is, at best, unsettled.

A large majority of oil and gas leases include a pooling clause, granting the lessee the power to pool the landowner’s royalty.

Therefore, while the general rule may be that ORIs cannot be pooled without their consent, the vast majority of lessee’s do have the authority to pool ORIs.

It is unclear whether the court (1) was stating that if the underlying lease granted pooling authority, that the ORI would be subject to pooling by the lessee, (2) was restating, in both sentences, the argument of lessee, or (3) merely stating that if the ORI owner gave consent to lessee pooling authority, that he would not later also be required to execute a unit agreement as well.

However, I believe a compelling argument could be made that the court was giving nod to the same rule followed in Texas, where ORIs are subject to lessee’s pooling authority contained in the underlying leases.

(Remember, in Texas, ORIs are subject to the lessee’s pooling authority as contained within the lease).

The court cited a well-known Texas case which held that an assignor who retains an overriding royalty interest is entitled to the same protections afforded to the lessee under the express or implied covenants of the lease.

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