This module explains the proportionate reduction clause which is important to know to understand that the Lessor's royalty payment amount. Also, in this module, is the delay rental clause: why it is used, the implied covenants to perform work, when delay rental payments are paid, and paid-up leases. Next is the surrender clause, explaining how the Lessee can surrender their portion and be relieved of obligations. This module goes in-depth into the pooling clause including: when and why it is needed, the drilling/spacing requirements, a pooling example, the calculation of net revenue interests in a pooled unit, the complications caused by the presence of a NPRI, partially-leased tracts, compulsory/forced pooling and the common compulsory-pooling participation options.

Duration: Approximately 35 minutes, depending on user pace.

Learning Objectives: Upon successful completion of this module, you will be able to:

• Describe why delay rentals are used and how they are paid
• Retell why most private-party leases today have “paid up” delay rentals
• Summarize why pooling is necessary for small tracts
• Calculate the net revenue interest for participants in a pooled unit
• Explain the basic purpose and procedures for forced pooling

Prerequisites: Module 1-8

Advance Preparation: None

Program Level: Non-technical

Format: Prerecorded narrator with supporting visuals. User controls course pace.