I'm not a lawyer, but I do know that your working interest is between you and Logan County based on your contract with Superior. I assume that all Gushers' contracts are more or less like mine, and I have spent a lot of time doing due diligence on my contract and assignments. This includes talking to the DO folks at Devon on multiple occasions.
Devon simply needs to get everyone to attest that they agree to the 25% royalty. That is the whole point of these stipulations. You signed a contract for a 75% working interest. 100% - 75% = 25% royalty interest. Seems like a no-brainer to me.
Signing the stipulation doesn't "give" Cactus anything. All it does is satisfy Devon that they can *give* you your contractual 75% of your acreage-proportioned working interest.
The recorded royalty interest is different from leasehold to leasehold within section 14. The pooling orders give some structure to this, but I understand that 14 is particularly complicated and the easiest way to sort this out is to have all working interest parties agree that a 25% royalty will be paid. To whom it is paid is another story--check out the public records for more details. Mostly to the mineral rights owners, but a little bit to Superior and Cactus. Likely less than 5% royalty to each of them. It has taken Devon and Superior months to negotiate these stipulations. They are based on many complicated issues of titling. The more parties involved, the more complicated the titles can be.
The only reason that Cactus has to be on the stipulation is that some of the assignments that Superior sold actually originated with Cactus. Many different parties own assignments in many different sections across Logan County. It shouldn't surprise anyone that Superior partnered with another party to bring more acreage to the table to meet the demand that existed for these assignments last year. As I understand it, this is simply part of the back side of that partnership. Cactus owned a lot of the assignments that were sold by Superior, and splitting the small percentage royalty on those assignments seems reasonable.
It's a reasonable deal for SIOR shareholders, as you guys get something out of this partnership that wouldn't have existed if Superior hadn't sold some of Cactus' assignments. Without the partnership, Superior and SIOR shareholders would would have gotten nothing for Cactus' acreage, and some Gushers wouldn't have had a seat at the table.
Plus, buying in as Gushers we were required to pay a third more than the AFE price to carry an additional 25% working interest for Superior (third for a quarter), and thus SIOR shareholders. For example, if I bought 6 acres of working interest for myself, I had to buy 2 more acres of working interest for Superior. This can only help every one of you. As I understand it, this working interest is not part of the stipulation, which pertains only to the royalty interest.
You can sign or not sign based on your assessment of the situation. But I do urge you to be careful that you understand the real issues.
