They are displayed in a table format with the most current data displayed at the top of the table. Kentucky's compulsory pooling laws pertain primarily to coal bed methane gas pools. § 45.1-361.21Bottom of Form. [Continental] made application to the Commission for an order amending Order No. Email Address. Non-consenting owners in Arkansas may either sell their interests in the unit to a participating landowner, lease their mineral interests to a member of the unit, or voluntarily pay for the costs of production as a working interest owner (become a consenting landowner). Pooling and unitization laws replace this common law tradition, thereby protecting the rights of landowners who are not the first to drill. Alabama uses a risk-penalty approach, wherein any non-consenting landowner who does not agree to pay a prospective proportionate share of drilling and completion costs is subject to a risk penalty of 150 percent of the tract’s share of the reasonable costs of drilling and production. This website uses cookies to analyze traffic and for other purposes. oil and gas case no. If an integration order is entered, the operator may charge each interested owner only for the actual reasonable expenditures required for the development of the resource. Code § 14-37-9-3. State. combustion at all times (North Dakota Administration Code Title 33, Article 15, Chapter 7, Section 2; Chapter 3, Section 3.1; Chapter 20). These terms may or may not include the payment of a risk-penalty. Ind. In the absence of voluntary pooling, the Commission, upon the application of any interested person, shall enter an order pooling … §38-08-08: statute authorizes voluntary pooling, authorizes compulsory pooling, and addresses application for pooling, notice, hearing, allocation of cost, and imposition of risk penalty; N.D.A.C. Phone. Docketing procedure: North Dakota Century Code (NDCC) Section 38-08-11. In that situation production would be allocated among pooled interests from the date of the pooling order. Compulsory pooling occurs most often in areas with high levels of hydraulic fracturing. Most commercial swimming pool rules signs will comply with the North Dakota rules as long as they incorporate all common safety and health regulations required for swimming pools. Following the filing of the application, notice … (Fla. Stat. In July 2006 the contract was upgraded to include GIS through the efforts of the North Dakota GIS Technical Committee, working in cooperation with the Information Technology Department and the Office of Management and Budget. Communitization provides for the pooling of federal and/or Indian lands, with other lands, when separate tracts under such federal and Indian lands cannot be independently developed and operated in conformity with an established well-spacing program. Adopted on March 3, 2014 and effective Difference between Pooling and Unitization; History; Importance/Effect 1. These mandatory unitization laws require the pooling of mineral interests into a drilling unit by the extraction company before resource extraction may occur (Figure 1). Spacing Unit Description. 3. The Oregon statute stipulates that tracts of land may be integrated based on terms that are "just and reasonable" to be determined by the Department of Geology and Mineral Industries and laid out in the compulsory pooling order. Under the Tennessee statute, a forced integration order may be entered if more than fifty percent of landowners with interests in the pool request such unitization. Unitization laws are mandatory but do not force landowners who do not wish to extract minerals from their land to participate in the process. Without compulsory pooling laws, state governments miss out on revenues from state severance and income taxes, and, because a portion of the oil or gas resource cannot be developed, the remainder of the land cannot be drilled in the most efficient manner. Mandatory pooling laws, however, have been controversial. Drilling Unit: A “drilling unit” is a parcel of land of a specified size and shape upon which one well may be drilled into an underground pool or reservoir. Compulsory pooling and unitization statutes have to be within the police power and should not violate due process requirements. In such circumstances, often one landowner, (Farmer A) is approached by an extraction company and asked to lease or sell his mineral rights. This is particularly relevant where there is one holdout landowner among many consenting owners. In this case, a landowner would be allowed to extract only an amount of oil or gas proportionate to their share of the overall drilling area. Milk Market Administrator - Upper Midwest Federal Order 30. In North Dakota, for example, the state force pooling statute provides that the operator has “a lien on the share of production from the spacing unit accruing to the interest of each of the other owners for the payment of his proportionate share of such expenses.” This approach heavily favors the non-consenting landowner, but also has the effect of discouraging voluntary pooling agreements by creating favorable conditions for hold-out landowners. NDCC 38-08-08 is the statute that defines the process for compulsory pooling and penalties on those who do not participate in the cost and risk of drilling operations. Rule of Capture: The “rule of capture” originated in the early laws governing ownership rights of wild animals. ”µöoxúJä¦y7Ü 2ºÿ#Òv‰Ô{‰t^W¹÷ éù‰…N}á°DCËBÓ/¿Gûµ×9amahµáž2Hü~. You consent to the use of cookies if you use this website. Compulsory pooling, also known as forced, statutory or mandatory pooling, forces landowners—who do not wish the mineral resources underneath their land to be extracted—to become part of a drilling unit. 15. North Dakota Pool Signs – Low Price Guarantee. For example, in West Virginia, non-consenting landowners may either: 1) sell their mineral interests to participating landowners for just consideration or 2) elect to participate on a limited basis (without sharing full costs) on terms to be determined by the board entering the order. Wyoming uses a risk-penalty approach, through which non-consenting owners may be required to pay their full share of the costs of production, plus up to 300 percent of their share of the costs and expenses of drilling, reworking, deepening or plugging back, testing and completing. An overview of the mineral resources of North Dakota, with photographs, maps, and references. a. North Carolina Environment and Energy Commission. Tel: 303-364-7700 | Fax: 303-364-7800, 444 North Capitol Street, N.W., Suite 515 The company will apply to the respective state agency that governs oil and gas to obtain what is called a “pooling order”. Now, let’s say Farmer C wants to similarly lease his land. Minnesota's statutory guidelines do not specifically allow for mandatory pooling; however, the statute indicates that such rules "may" be adopted by the state commissioner of natural resources. production costs are carried by the operator and the owner is only responsible for the proportionate share of the costs of drilling if the well is successful. In Vermont, non-consenting owners may be compelled to pay his or her share of costs out of his or her share of production, plus a supervision, risk, and interest assessment (a risk-penalty)of up to 300 percent of that owner's share of the costs. This approach represents the most common statutory scheme among major oil and gas producing states. They utilize statutory law to obtain consent to pool these unleased tracts. Kansas has strict requirements that must be met before a compulsory pooling order will take effect; however, once granted, the non-consenting landowner may be required to pay up to 100 percent of his share of the aboveground drilling costs and 300 percent of his share of the physical drilling and underground pipeline costs. The non-consenting landowner is typically offered a chance to either participate in the voluntary pooling agreement or is granted a statutorily-specified compensation package. In Alaska, non-consenting landowners may be charged only for the costs of production attributable to their proportionate share in the event that the drilling is successful. Under this approach, non-consenting owners can choose an alternative from a list of options that best fits their own specific circumstances upon receiving a mandatory pooling order. When a common pool of oil or gas lies under the property of two or more neighboring landowners, the rule of capture applies unless it has been superseded by state statutes Accordingly, the first person to gain control over the resource (by extracting the resource from the ground) gains exclusive ownership over that resource. 14. Where, in certain circumstances, one adjoining landowner does not consent to a voluntary pooling agreement (unitization), compulsory pooling laws allow resources to be extracted from underneath the non-consenting landowner’s property by requiring this landowner to become part of a drilling unit. The increase in the use of horizontal fracturing has made mandatory pooling laws particularly relevant. The risk-penalty approach is thought to encourage voluntary pooling agreements by landowners who want to avoid paying a risk-penalty—which can sometimes be as high as 300 percent of the reasonable costs of production. Florida has statutory rules regarding voluntary pooling and unitization; however, there is no forced or compulsory pooling law in the state. Copyright 2021 by National Conference of State Legislatures. Finally, in certain states, a force pooling order may authorize a lien on production to secure the debt of the non-participating cotenant. 215 (Columbus, OH: Capital University Law School, 2014). 23084 order no. Forced pooling occurs when the operator can’t voluntarily pool all mineral interests in a unit so that a well can be drilled. How is my interest in a well calculated? 25417 in the matter of a hearing called on a motion of the commission to consider amending the bakken, bakken/three forks, three forks, and/or sanish pool field rules to establish oil conditioning standards and/or impose such provisions as deemed appropriate to improve the Company Name. Under the Ohio scheme, the operator or owner of a well (or members of a voluntary drilling unit) who bears the costs and risks of production may deduct from a non-consenting owner's share of the well's profits his share of the costs of operating the well plus a risk penalty of up to 200 percent of these costs. Compulsory pooling orders also serve as anti-holdout laws, protecting the right of landowners to exploit their own mineral rights even where their own land is of insufficient acreage to allow for extraction under state law. States have adopted mandatory pooling laws to attempt to protect landowner rights and promote the efficient extraction of natural resources. This is particularly relevant where there is one holdout landowner among many consenting owners. If, however, compulsory pooling orders A non-consenting landowner in Montana may be required to pay up to 100 percent of his share of the costs of the operation of the well, plus 100 percent of his share of any equipment acquired to drill and operate the well, plus up to 200 percent of the costs of staking and well-site preparation. This percentage varies among states, with Ohio’s law requiring the consent of 90 percent of landowners and Virginia’s law requiring only 25 percent before other landowners may be obliged to enter into the mandatory pool. 30) is 1 of 11 regional Federal milk marketing orders in the United States operating under a common mission of helping to facilitate the efficient marketing of milk and dairy products. Later, this rule was applied to the “capture” of natural resources. Field Name. Denver, CO 80230 North Dakota oil and gas attorneys. The South Dakota statute allows non-participating owners to participate in the risk and cost of the drilling or may elect to surrender his or her leasehold interest to the participating owners on some "reasonable basis and for a reasonable consideration", to be determined by the pooling order. In addition, non-consenting owners may be required to pay up to 200 percent of their share of any new equipment costs. The New York statutory scheme enumerates a list of compensation and penalty options for non-consenting landowners. Oklahomans who receive a forced pooling order may choose to either receive enumerated royalty payments from the operator of the well (with no costs deducted) or may choose to participate in the operation of the well, paying operating costs up front and receiving a greater share of the well's profits. Lease Number. Non-consenting owners in Mississippi are required to pay, from their share of profits from the well, 100 percent of their share of any new surface equipment, 250 percent of their share of the reasonable costs as provided in the pooling order, 250 percent of their share of any new subsurface well equipment, and 100 percent of their share of the cost of operation of the well commencing with first production. Finally, in certain states, a force pooling order may authorize a lien on production to secure the debt of the non-participating cotenant. Solving Resource Disputes: Drilling Unitization and Pooling, Pooling of Properties for Oil and Gas Production. "Producer" means the owner of a well or wells capable of producing oil or gas or both. Va. Code Ann. Although this process does not allow extraction companies surface access to the non-consenting landowner’s property, it does allow drilling to occur underneath their land, while compensating the owner for the extracted resource. 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