31 Tex. Admin. Code § 9.81 - Pooling and Unitizing of State Property

(a) Approval. An agreement to pool or unitize any state leases or royalty interests or to amend an existing unit must be approved by the SLB or appropriate board or agency and executed by the commissioner to be effective. When necessary, the SLB meets on the first and/or third Tuesday of each month.

(b) Procedure.

(1) Submit a completed pooling or production sharing application and the processing fee prescribed by § 3.31 of this title, (relating to fees) to the GLO. Application forms may be obtained from the GLO upon request. The application must be submitted at least 30 business days prior to the SLB meeting at which the application will be considered. If not timely submitted, the application will be considered at the next available meeting. Any proprietary information submitted with the application shall be kept confidential as required by law, and upon request of applicant, will be returned after examination by GLO staff. The application should include the following information if available:

(A) a legal description of the area to be pooled (or to be subject to production sharing) and a list of the affected leases;

(B) geological and geophysical data; e.g., structural maps, isopach maps, cross-sections, productive limits, engineering studies and analysis;

(C) electrical and/or geophysical logs;

(D) information on wells drilled in the general area of the proposed unit, and current production rates of offset wells;

(E) names of all the working interest owners in the leases (or units) to be pooled (or from which production will be shared) and the names and respective capacities (e.g., president, vice-president, attorney-in-fact, etc.) of the persons authorized to execute the pooling or production sharing agreement;

(F) for Relinquishment Act Leases, a list of the owners of the soil who have not authorized pooling in the lease and will be executing the pooling agreement; and

(G) any other data which may be requested.

(2) Pooling and production sharing applications will be reviewed by GLO staff and the pooling committee. The pooling committee consists of a representative from the GLO and the governor's office. The pooling committee meets to review pooling applications before the week of an SLB meeting. An appearance before the pooling committee is generally not required, however, an applicant may be present while the application is considered. The pooling committee will present the terms of the application to the SLB and make a recommendation.

(c) Agreement provisions. After pooling approval by the SLB, the state's form of pooling agreement, or ratification will be prepared by the GLO and sent to the applicant for signature. The agreement may provide:

(1) the effective date of the agreement;

(2) the term of the agreement, whether it be for a specified term (a temporary pooled unit) or for so long as the pooled mineral is produced from the pooled unit or the leases in the unit are otherwise maintained in force (a standard pooled unit). A new pooling application should be submitted prior to the expiration of a temporary pooled unit to extend its term or to obtain a standard pooled unit;

(3) the manner in which unit production is to be allocated to each tract within the unit (e.g., surface acres, productive acreage or volumetric calculation, etc.); and

(4) any other provisions which the SLB considered necessary to protect the state's interests.

(d) Requirement of timely execution.

(1) If the pooling agreement or ratification is not signed and returned to the GLO within 90 days of approval by the SLB, or within 30 days after the approved pooling agreement or ratification has been sent to the applicant by the GLO, whichever date is later, the agreement or ratification shall be of no force and effect, unless a written request is made and accepted by the GLO to extend the 90 or 30 day period, as applicable.

(2) An applicant may resubmit a pooling or production sharing application to the GLO.

Notes

31 Tex. Admin. Code § 9.81

The provisions of this §9.81 adopted to be effective January 7, 1999, 24 TexReg 146; amended to be effective August 9, 2009, 34 TexReg 5379; Amended by Texas Register, Volume 49, Number 23, June 7, 2024, TexReg 4058, eff. 6/11/2024