How cool would it be to tell your operating partner that you screwed up the joint operating agreement and Division Order and that you REALLY meant to put into them that you had 20% working interest instead of 15% working interest and that you had a 20% non consent penalty instead of an in or out provision... AND you did it several years after the fact... after several wells were drilled.
What do you think your "partner" would tell you? I expect the first coupla letters would be F and U.
I know, I know. You are saying to yourself "There goes ol' Choke again, on one of his ridiculous tangents". But you would be wrong. It is only ridiculous and wrong if the "you" in the preceeding scenario is actually "you" or anyone you know... a private citizen or entity. It is NOT ridiculous if it is your duly elected representative of the people.
This has occured at least twice in recent months, and not in some God foresaken South American or African shit for brains idiocracy, but right here in the good ol' US and Canada.
The first occasion was when Congress decided that the Mineral Management Service had "accidentally" signed and awarded leases with fixed royalty provisions. Congress after the fact decided that they could get more, and claimed this "mistake" and asked the oil companies to relinquish their old leases in favor of the new. Mind you, this was NOT a "misprint". The original lease terms were what the oil companies thought they were bidding on, not the new deal. Most of the oil companies said... well, the first two letters were F and U.
Congress, a group downright unamenable to being questioned like that, then declared that any oil company that did NOT relinquish their leases would no longer be allowed to bid on offshore blocks. Take that, Rule of Law. Don't you dare question the Great and Powerful Ahhhs-oles.
Alberta, heretofore known as the Texas of Canada... a bastion of he-man risk taking kick ass capitalism in the Peoples Republic of Canadastan, decided to confiscate mineral royalty there as well. The better a well you drill, the bigger the percentage take. Kinda like progressive taxation. They used the excuse that the old method, where the royalty rate was fixed and the leases were sold in open auction, didn't reflect "market value", presumably because an open auction doesn't reflect market value. That would take a Galbraithian economist to explain, so don't hold your breath trying to understand it. By doing this after that fact, the result is they get the auction price up front, then change the terms on the back end to screw the buyer. This only works once. Alberta can get ready to see a lot less money bid at auction, and probably a lot fewer wells drilled, unless the US adopts this kleptonometric approach to royalties.