Dissolution of Pooled Unit (By Unit Owners)
Understanding this form
The Dissolution of Pooled Unit form is a legal document used by unit owners to officially end a pooled unit arrangement involving oil and gas leases. This form allows unit owners to terminate the existence of the pooling arrangement and revert ownership of their leases to the original conditions prior to pooling. It is distinct from other forms used for lease agreements because it specifically addresses the dissolution of a unit that was created for the production of oil or gas.
Key components of this form
- Names and addresses of the unit owners.
- The effective date of dissolution.
- Reference to the original pooling agreement and associated recorded documents.
- A declaration by unit owners to dissolve the pooling unit.
- Exhibits detailing the leases and lands involved.
- Signature acknowledgment by all unit owners.
Situations where this form applies
This form is needed when the purpose for which a pooled unit was formed no longer exists, and unit owners want to dissolve the unit. Scenarios may include situations where the pooled production ceases or when the owners plan to reassign individual leases. It is a critical step for unit owners to regain control over their respective leases and terminate any collective obligations under the pooling agreement.
Who needs this form
This form is intended for:
- Unit owners who participated in the pooling of oil and gas leases.
- Individuals or entities that hold a lease and want to dissolve a pooled arrangement.
- Parties looking to revert their lease holdings back to individual ownership.
Steps to complete this form
- Identify and list all unit owners involved in the pooling agreement.
- Specify the effective date for the dissolution of the unit.
- Reference the original designation or declaration of the unit, including recording information.
- Declare the desire to dissolve the pooling unit and indicate the status of each lease thereafter.
- Ensure all unit owners acknowledge and sign the document.
Notarization guidance
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to include all current unit ownersâ names and signatures.
- Not specifying the correct effective date for the dissolution.
- Omitting necessary references to the original pooling documents.
- Using vague descriptions of the leases and lands involved.
Why use this form online
- Access to expertly crafted legal templates ensures compliance with applicable laws.
- Convenient download and editing options allow users to customize the form as needed.
- Immediate availability without the need for travel or scheduling appointments.
Legal use & context
- The dissolution of a pooled unit must comply with the terms of the original pooling agreements.
- Unit owners may face legal consequences if the dissolution is not executed following applicable laws.
- Understanding the implications of dissolving a pooled unit can help owners protect their interests in the leases involved.
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FAQ
It also records a "Declaration of Pooling" or similarly named document in the land records office at the local Courthouse. The declaration shows the boundaries of the pooling unit and identifies all the landowners and amount of property each landowner actually has in the unit.
Pooling is the combination of all or portions of multiple oil and gas leases to form a unit for the drilling of a single oil and/or gas well.The oil and gas company can lease these under separate leases and separate terms and then pool these parcels to drill the well.
Net revenue is the amount that is shared among the property owners. To determine net revenue interest, multiply the royalty interest by the owner's shared interest. For example, if you have a 5/16 royalty, your net royalty interest would be 25% multiplied by 5/16, which equals 7.8125% calculated to four decimal places.
As noted above, while pooling focuses on efficiently combining lands for the purpose of obtaining a drilling permit to drill a single well, unitization focuses on the combination of interests covering a larger area to facilitate development of all or part of a common source of supply (i.e. a field/reservoir).
The specific provisions of the laws vary from state to state, but drillers are generally allowed to extract minerals from a large area or "pool"--in most states a minimum of 640 acres--if leases have been negotiated for a certain percentage of that land. The company can then harvest gas from the entire area.
Pooling Clause: Joining the Leased Land with Other Land The area formed is called a pool or sometimes a pooled unit. Pooling permits the lessee to prevent waste by avoiding unnecessary drilling and to protect the correlative rights of the mineral owners in the common reservoir.
Use this formula to calculate your decimal share of royalties from the producing well: (Mineral Interest Share) times (Royalty Rate) = (Royalty Share Decimal). Example 1: (1/3 x 100% mineral interest) times (1/8 Royalty Rate) = 1/3 x 1/8 = 1/24 = 0.04166667 RI.
The oil and gas leases being used by companies leasing in the Marcellus shale include a provision that allows the gas company to combine, or pool, the landowner's acreage with property from other leased landowners to form a production unit.
Once a Pooling Order is entered, you will receive a copy of the Order, which will state your options as an owner of an interest in the unit. Typically, the Order will afford you a number of options of a cash bonus and royalty payments on production based on the fair market value of your interest.
Forced Pooling (sometimes called Statutory or Compulsory Pooling) is a legal mechanism that allows oil and gas operators to drill wells when they are unable to get 100% of the mineral interests to commit to support the drilling of a well.