Tennessee Provisions That May Be Added to A Pooling Or Unit Designation

• Category: Oil Gas and Minerals - Pooling and Unitization
• State: Multi-State
• Control #: US-OG-369
• Format: Word; Rich Text

Description

This provision document contains termination, signature, and depth provisions which may be added to a pooling or unit designation.

Tennessee provisions that may be added to a pooling or unit designation include various crucial elements to ensure efficient oil and gas exploration and production. These provisions play a significant role in regulating the formation and administration of pooling or unit areas in Tennessee. 1. Pooling Designation: The pooling designation is a legal mechanism used in Tennessee to combine multiple tracts or leases within a specific area for oil and gas operations. It helps prevent waste, maximize resource recovery, and avoid the problems of drilling wells too close to each other. 2. Unit Designation: Similar to pooling designation, unit designation is another legal procedure that combines different tracts or leases into a single unit for the purpose of conducting oil and gas operations. This designation promotes greater operational efficiency, reduces land surface disturbance, and enhances resource management. Here are some specific provisions that may be added to a pooling or unit designation in Tennessee: a. Pooling Criteria: These criteria establish the qualifications necessary for a tract or lease to be included in a pooling or unit area. Factors such as mineral ownership, lease terms, geographic proximity, and reservoir characteristics are considered when determining eligibility for pooling or unit designation. b. Acreage Allocation: This provision outlines how the acreage within a pooling or unit area will be allocated among the working interest owners. It may consider factors like mineral interests, leasehold interests, and financial contributions made by each participant. c. Cost and Revenue Allocation: This provision determines how costs associated with drilling, operating, and managing the pooled or unitized area will be allocated among the interest owners. Additionally, it addresses how revenues generated from production will be distributed among participants. d. Voting Rights: This provision stipulates the rights and privileges of interest owners regarding the decision-making process for the pooled or unitized area. It may outline the voting percentages required to approve drilling operations, amend agreements, or make significant decisions affecting the working interest owners. e. Duration and Termination: This provision establishes the timeframe for the pooling or unit designation and specifies conditions under which it may be terminated. It may include provisions for extension, termination, or reconsideration of the pooling or unitization agreement. f. Unit Operations: This provision covers the management and operation of the unitized area. It ensures the coordination of reservoir development activities, well spacing, drilling schedules, and production plans among the participating interest owners. g. Administrative Requirements: This provision addresses the necessary filings, notifications, and reports that must be submitted to regulatory authorities in Tennessee. It ensures compliance with state rules and regulations pertaining to pooling or unitization operations. By incorporating these provisions into the pooling or unit designation, Tennessee aims to facilitate responsible and efficient oil and gas development, protect the rights of interest owners, and ensure equitable distribution of costs and revenues.