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.
New Mexico Designation of Pooled Unit and Declaration of Pooling for Oil or Gas plays a vital role in the efficient extraction and management of oil and gas resources in the state. This legal process allows multiple mineral rights owners to combine their interests in a specific area, forming a "pooled unit" that facilitates the coordinated development and production of hydrocarbons. Here's an in-depth description of what New Mexico Designation of Pooled Unit and Declaration of Pooling For Oil Or Gas entails, along with its various types and associated keywords: 1. Definition and Purpose: The New Mexico Designation of Pooled Unit and Declaration of Pooling for Oil or Gas refers to the legal mechanism through which multiple leaseholders or mineral rights owners consolidate their interests into a unified unit for efficient extraction. This process ensures optimal resource recovery and prevents waste while maximizing the benefits for all parties involved. 2. Lessor-Lessee Agreement: Initially, the process begins with an agreement between the mineral rights' owner (lessee) and the property owner (lessor) known as the Lessor-Lessee Agreement. This agreement defines the terms and conditions for pooling. 3. Voluntary Pooling: Voluntary pooling occurs when mineral rights owners willingly agree to combine their interests within a specific area. This consolidation generally requires written consent from all parties involved, and it aims to streamline operations while minimizing surface disruption and environmental impact. 4. Compulsory Pooling: Compulsory pooling, also known as forced pooling or statutory pooling, may be initiated when voluntary pooling cannot be achieved. In such cases, a designated regulatory body (e.g., the New Mexico Oil Conservation Division) typically intervenes to ensure resource extraction occurs efficiently while protecting the rights of all stakeholders. 5. Community Pooling: Community pooling is a specific type of pooling that emphasizes collective benefits within a community. This approach encourages local cooperation and ensures fair distribution of proceeds within a defined geographical area. 6. Pooled Unit Designation: Once pooling is agreed upon, a pooled unit is established through the formal designation process. Parties involved, often including the operator responsible for drilling and production, submit an application to the regulatory body, providing details such as the proposed boundaries, participating leaseholds, estimated reserves, and development plans. 7. Pooling Order: Upon submission and review, the regulatory body issues a pooling order, stipulating the terms and conditions of the unit. This order defines the specific area to be pooled, the contributing leaseholds, the allocation of costs and royalties, and other important considerations to protect the rights and interests of all stakeholders. 8. Allocation and Distribution: The pooling order also outlines how costs and proceeds from production will be distributed among the pooled unit participants. Factors such as acreage, ownership interest, reservoir productivity, and other contractual agreements are taken into account during this allocation process. 9. Drilling Obligations: Pool participants are typically subject to drilling obligations within the pooled unit. These obligations ensure that the development and production of the resources occur in a timely manner while preventing undue delays. 10. Termination and Modification: Under certain circumstances, a pooled unit can be terminated or modified. This may happen if a participating leasehold becomes non-operational, fails to comply with obligations, or if it is determined that modification would optimize resource recovery. Keywords: New Mexico, Designation of Pooled Unit, Declaration of Pooling, Oil, Gas, Mineral Rights, Leaseholders, Lessor-Lessee Agreement, Voluntary Pooling, Compulsory Pooling, Forced Pooling, Statutory Pooling, Community Pooling, Pooled Unit Designation, Pooling Order, Allocation, Distribution, Drilling Obligations, Termination, Modification.
