This Designation is executed by the Operator and Working Interest Owners and filed of record for the purpose of evidencing their election to exercise the pooling authority granted to the lessees in the Leases, to give notice of the Unit being established, and to identify and describe the lands included in the Unit.
Arizona Designation of Pooled Unit and Declaration of Pooling for Oil or Gas are legal documents that outline the process and arrangements for unitizing or pooling oil or gas resources within the state of Arizona. These documents are crucial for ensuring efficient and fair extraction operations in the industry. In Arizona, the Designation of Pooled Unit serves as a formal agreement between operators and leaseholders to combine their individual interests, leases, and mineral rights to form a unified unit for exploration and production purposes. By pooling their resources, operators and leaseholders can optimize the extraction process, reduce costs, and enhance overall oil or gas recovery. The Declaration of Pooling, on the other hand, provides a comprehensive framework for implementing and managing the pooled unit. It establishes the rules, regulations, and obligations for all participating parties, ensuring equitable distribution of production revenues and expenses. The declaration also establishes the proportionate share and working interest of each party involved, often expressed as a percentage, in the pooled unit. Different types of Arizona Designation of Pooled Unit and Declaration of Pooling for Oil or Gas may include: 1. Voluntary Pooling: This type of pooling occurs when operators and leaseholders voluntarily choose to combine their interests to form a pooled unit. It is typically driven by the mutual understanding and cooperative efforts of the parties involved. 2. Compulsory Pooling: In some cases, pooling may be enforced by the Arizona Oil and Gas Conservation Commission or other regulatory bodies. Compulsory pooling ensures that all parties sharing a common oil or gas reservoir participate in the unitization process, even if they are initially unwilling or unresponsive. 3. Unitization Agreement: This document outlines the detailed terms and conditions of the pooled unit, including the duration of the agreement, drilling obligations, cost-sharing arrangements, and the formula for distributing production revenues among stakeholders. It serves as a legally binding contract governing the operations within the unit. 4. Pooling Order: A pooling order is an official ruling issued by the regulatory authority, such as the Arizona Oil and Gas Conservation Commission, to authorize the pooling of interested parties' resources in a designated area. It confirms the rights and responsibilities of each party involved and grants the necessary permissions to conduct exploration and production activities. 5. Pooling Amendment: Over time, circumstances may change, requiring modifications to an existing pooled unit. A pooling amendment is a supplemental document that outlines any revisions, additions, or alterations to the original pooling agreement. It ensures that the pooling arrangement remains updated and aligns with the evolving needs and dynamics. In conclusion, the Arizona Designation of Pooled Unit and Declaration of Pooling for Oil or Gas are essential documents for the efficient and cooperative extraction of oil or gas resources. Whether voluntary or compulsory, these documents establish the legal framework, unitization terms, and responsibilities for operators and leaseholders involved in the pooled unit, enhancing the overall management and productivity of oil or gas operations in Arizona.
