Pooling is a tool used to bring together small or irregular tracts of land or mineral interests to form one drilling unit for the purposes of oil or gas production. In general, pooling can be accomplished in a variety of ways, including separate pooling agreements, community leases, voluntary pooling clauses within leases, and compulsory pooling statutes. For purposes of this article, we will be focusing on voluntary pooling lease clauses and compulsory pooling statutes.
This article will discuss the requirements for valid pooling under a voluntary lease provision, briefly outline how royalties are distributed for pooled units, and discuss remedies available to a lessor for invalid pooling. In addition, we will discuss anti-dilution and Pugh clauses, which can place further limitations on a lessee’s discretion to pool.
Finally, this article will provide a brief overview of compulsory pooling statutes and look at how Texas’ Mineral Interest Pooling Act differs from compulsory pooling statutes utilized in a majority of the oil and gas producing states.
Texas Bar CLE
Oil, Gas & Energy Resources Law 101
State Bar of Texas
M.C. Cottingham Miles
Gina S. Warren & Mark G. Walston,
Pooling Clauses and Statutes,
(M.C. Cottingham Miles eds., 2013).
Available at: https://scholarship.law.tamu.edu/facscholar/712