Dissolution of Pooled Unit (By Unit Owners)

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.

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.

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.

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.

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.

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).

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.

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.