Advocacy

Texas Royalty Council Policy Statement Regarding Field Unitization

For over 100 years Texas has had a voluntary system of field unitization. By all accounts, that system has worked well over the years and has been part of the legal framework that helped lead our great state to be the top energy producer in the United States and be a global leader in oil and gas production and innovation.

The members of the Texas Royalty Council have serious concerns surrounding any proposed new ability for a handful of royalty owners or a small number of working interest owners to be allowed to force others into a production arrangement that may not be in the best interest of all mineral or royalty owners of a particular field. The Council continues to be vigilant in analyzing any proposed statutory change that would alter the ability of a majority of royalty owners from determining their own path when it comes to historic ownership rights and the future oil production of a particular field.

The Council does recognize and acknowledge that many of the historic oil fields that first brought Texas into the global economy are now in serious production decline following primary and secondary recovery operations. Thoughtful consideration may be required in order to ensure that the maximum amount of recoverable crude oil is extracted from these declining fields. In all instances, from exploration and primary production to enhanced oil recovery operations, the Council will evaluate all proposals with one guiding principal in mind – the protection of correlative rights for royalty owners while maximizing the efficient recovery of all mineral resources for those same royalty owners.

The Council recognizes that modifications to the existing unitization laws may be necessary to maximize royalty opportunities in the declining fields, however any modification must protect correlative rights. Adherence to these fundamental principals will allow the Texas Royalty Council to continue to support the individual property rights of our member royalty owners while ensuring that all owners are allowed to benefit from their historic ownership interests.