Every state except, Virginia, that has compulsory pooling provisions provides a statutory declaration of public policy and legislative findings for which it is based; provides election options that enable a gas/oil owner (including leaseholders) the opportunity to recover his fair and equitable proportional share of the gas/oil in the pool; provides a mechanism for oversight of the gas/oil industry; monitors and conducts detailed auditing of escrow accounts; and enforces gas/oil regulations.
No state, except Virginia, provides for a cash bonus consideration of one dollar or five dollar per mineral acre owned plus a royalty of 12½% of the proceeds received by the unit operator for the sale of gas/oil from the well, minus all post production costs incurred downstream of the well, including but not limited to, all gathering, compressing, treating, transporting, and marketing costs, whether performed by a unit operator or a third person, as fair, reasonable and equitable compensation to be paid to the owner.
No state, except Virginia, has legislation and regulations aimed at creating, supporting and maintaining a monopoly or cartel for gas/oil production and state agencies and boards that works to achieve that effect.
The only way to determine the value of the gas and oil in a pool is to produce it, and the only way to insure that an owner that is not notified, or that fails to make an election receives his “fair and equitable share” of the gas/oil produced, is to bring him on as a carried well operator. Additionally, states recognize that since they have forced gas/oil owners into this situation, they must provided adequate information to allow the gas/oil owners or claimants to make an informed election decision and provide oversight of the assignment of interests, monitor the accuracy of production volume reported, price paid, the accuracy of payments received and a full accounting of the payments made into escrow accounts and disbursed from them. Virginia provides no oversight.
In Alabama, where CBM technology originated, gas owners who failed to make a election are paid a royalty of three sixteenths (18.75%) free and clear of all costs until the proceeds from the well equal 100% of the costs (force pooling without risk compensation) or 250% (force pooling with risk compensation). Incidentally, the average yearly production from vertical CBM methane wells in Southwest Virginia exceeds that of Alabama. Additionally, the gas from CBM wells in Virginia requires minimal treatment and has a higher BTU content.