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.
Nebraska Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas is a legal process that allows multiple oil or gas leases or tracts to be combined into a single unit for operational and economic efficiencies. It provides guidelines for the drilling, production, and allocation of royalties among the owners of the pooled unit. In Nebraska, there are primarily two types of Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas: 1. Voluntary Pooling: This type of pooling occurs when the owners of the oil or gas leases voluntarily agree to combine their interests into a single pooled unit. It is usually done in situations where individual leases or tracts are not economically viable or where enhanced recovery techniques are necessary to maximize production. 2. Forced Pooling: Also known as compulsory pooling or statutory pooling, this type of pooling involves the coercion of non-consenting owners to become part of the pooled unit. Forced pooling is typically authorized by state statutes to ensure the efficient development of oil or gas resources and prevent waste. It allows an operator to pool together leases or tracts if a certain percentage of ownership has already consented to pooling. The Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas document includes various essential elements: a) Market Value of the Mineral Estate: This section determines the fair market value of the mineral interests in the proposed pooled unit. It outlines the compensation and royalty payments for each owner based on their leasehold or mineral entitlement. b) Pooling Area: Specifies the geographical boundaries of the pooled unit, including relevant lease or well numbers, sections, townships, and ranges. c) Operations and Authority: Describes the rights and responsibilities of the operator, such as drilling, completion, production, maintenance, and restoration of the pooled unit. d) Share of Royalties: Explains how the royalties and profits from the pooled unit will be distributed among the owners. It may include provisions for adjusting royalty interest based on drilling and production costs. e) Term and Termination: Specifies the duration of the pooling agreement and the conditions under which it can be terminated or modified. The Nebraska Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas plays a crucial role in optimizing the exploration and development of oil or gas resources. It ensures fairness, efficiency, and proper allocation of royalties among the owners of mineral estates while maximizing the economic potential of the pooled unit.
