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.
The Kentucky Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas is a legal process that allows for the efficient and orderly extraction of oil or gas from multiple landowners' properties located within a designated area in Kentucky. This process assists in streamlining the exploration and production operations of oil or gas wells, maximizing resource utilization and minimizing potential conflicts among landowners. In Kentucky, there are primarily two types of Designation of Pooled Unit and Declaration of Pooling methods: compulsory pooling and voluntary pooling. 1. Compulsory Pooling: Compulsory pooling, also known as forced pooling, applies to situations where a certain percentage of mineral rights owners within a designated area agree to pool their interests in development. This process ensures that all participating landowners benefit from the development of the oil or gas resources in a fair and equitable manner. The Kentucky Oil and Gas Conservation Commission oversees the approval of compulsory pooling applications, allowing operators to develop resources even if some mineral rights owners choose not to participate. 2. Voluntary Pooling: Voluntary pooling refers to situations where landowners actively agree to pool their oil or gas interests. This approach enables neighboring landowners to join forces voluntarily, combining their acreage and mineral rights to form a more economically viable unit. By pooling resources, landowners can attract larger operators, negotiate better lease terms, and increase the overall potential for successful oil or gas extraction. Both compulsory and voluntary pooling methods require the creation of a Designation of Pooled Unit and the Declaration of Pooling document. These legal agreements establish the boundaries and terms under which the pooled unit will operate. The documents typically include details such as the acreage, participating leaseholders, royalty interests, drilling obligations, cost-sharing provisions, and any other relevant terms that ensure fair distribution of benefits among the involved parties. The Kentucky Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas is a critical mechanism that fosters collaboration, streamlines operations, and encourages responsible development of oil or gas resources in the state. It serves as a tool to maximize efficiency, environmental stewardship, and fairness within the industry, benefiting both landowners and operators alike.
