CHAPTER 102. POOLING
NATURAL RESOURCES CODE
TITLE 3. OIL AND GAS
SUBTITLE C. POOLING AND COOPERATIVE AGREEMENTS
CHAPTER 102. POOLING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 102.001. TITLE. This chapter may be cited as the Mineral
Interest Pooling Act.
Acts 1977, 65th Leg., p. 2570, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.002. DEFINITIONS. In this chapter:
(1) "Mineral" means and is limited to oil and gas.
(2) "Commission" means the Railroad Commission of Texas.
Acts 1977, 65th Leg., p. 2570, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.003. APPLICATION TO CERTAIN RESERVOIRS. The provisions
of this chapter do not apply to any reservoir discovered and
produced before March 8, 1961.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.004. APPLICATION TO PUBLIC LAND. (a) The provisions
of this chapter do not apply to land owned by the State of Texas
nor to land in which the State of Texas has an interest directly
or indirectly.
(b) The provisions of this chapter do not amend, repeal, change,
alter, or affect in any manner the authority or jurisdiction of
the Commissioner of the General Land Office or the State of Texas
with respect to any land or interest in land in which the
Commissioner of the General Land Office has jurisdiction.
(c) The provisions of this chapter do not amend, repeal, change,
alter, or affect in any manner the authority, jurisdiction, or
consent of the Commissioner of the General Land Office on the
pooling of any interest now subject to the jurisdiction,
authority, or consent of the Commissioner of the General Land
Office.
(d) With the approval or consent first obtained, or at the
instance of the Commissioner of the General Land Office, or any
board or agency having jurisdiction, the land in which the State
of Texas has an interest as described in this chapter may be
pooled under the provisions of this chapter.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
SUBCHAPTER B. REQUIREMENTS AND PROCEDURE FOR POOLING
Sec. 102.011. AUTHORITY OF COMMISSION. When two or more
separately owned tracts of land are embraced in a common
reservoir of oil or gas for which the commission has established
the size and shape of proration units, whether by temporary or
permanent field rules, and where there are separately owned
interests in oil and gas within an existing or proposed proration
unit in the common reservoir and the owners have not agreed to
pool their interests, and where at least one of the owners of the
right to drill has drilled or has proposed to drill a well on the
existing or proposed proration unit to the common reservoir, the
commission, on the application of an owner specified in Section
102.012 of this code and for the purpose of avoiding the drilling
of unnecessary wells, protecting correlative rights, or
preventing waste, shall establish a unit and pool all of the
interests in the unit within an area containing the approximate
acreage of the proration unit, which unit shall in no event
exceed 160 acres for an oil well or 640 acres for a gas well plus
10 percent tolerance.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.012. OWNERS AUTHORIZED TO APPLY FOR POOLING. The
following interested owners may apply to the commission for the
pooling of mineral interests:
(1) the owner of any interest in oil and gas in an existing
proration unit or with respect to a proposed unit;
(2) the owner of any working interest; or
(3) any owner of an unleased tract other than a royalty owner.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.013. REQUIRED VOLUNTARY POOLING OFFER. (a) The
applicant shall set forth in detail the nature of voluntary
pooling offers made to the owners of the other interests in the
proposed unit.
(b) The commission shall dismiss the application if it finds
that a fair and reasonable offer to pool voluntarily has not been
made by the applicant.
(c) An offer by an owner of a royalty or any other interest in
oil or gas within an existing proration unit to share on the same
yardstick basis as the other owners within the existing proration
unit are then sharing shall be considered a fair and reasonable
offer.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.014. PRODUCTIVE ACREAGE EQUAL TO STANDARD PRORATION
UNIT. (a) The commission shall not require the owner of a
mineral interest, the productive acreage of which is equal to or
in excess of the standard proration unit for the reservoir, to
pool his interest with others unless requested by the holder of
an adjoining mineral interest, the productive acreage of which is
smaller than such pattern, who has not been provided a reasonable
opportunity to pool voluntarily.
(b) If the conditions specified in Subsection (a) of this
section exist, the commission shall pool the smaller tract with
adjacent acreage on a fair and reasonable basis and may authorize
a larger allowable for the unit if it exceeds the size of the
standard proration unit for the reservoir.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.015. PROHIBITED PROVISIONS IN OPERATING AGREEMENT. A
pooling agreement, offer to pool, or pooling order is not
considered fair and reasonable if it provides for an operating
agreement containing any of the following provisions:
(1) preferential right of the operator to purchase mineral
interests in the unit;
(2) a call on or option to purchase production from the unit;
(3) operating charges that include any part of district or
central office expense other than reasonable overhead charges; or
(4) prohibition against nonoperators questioning the operation
of the unit.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.016. NOTICE OF HEARING. On the filing of an
application for pooling of interests into a unit under the
provisions of this chapter, at least 30 days notice before
hearing on the application shall be given to all interested
parties, including notice by publication if there are unknown
owners or owners whose whereabouts are unknown. The notice shall
be given in the manner and form prescribed by the commission.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.017. POOLING ORDER. (a) After notice and hearing, all
orders effecting the pooling shall be made on terms and
conditions that are fair and reasonable and will afford the owner
or owners of each tract or interest in the unit the opportunity
to produce or receive his fair share.
(b) Each order shall:
(1) describe the land included in the unit, identifying the
reservoir to which it applies;
(2) designate the location of the well; and
(3) appoint an operator for the unit.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.018. ACREAGE SUBJECT TO POOLING. The commission shall
pool only the acreage which at the time of its order reasonably
appears to lie within the productive limits of the reservoir.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
SUBCHAPTER C. RIGHTS IN A POOLED UNIT
Sec. 102.051. OWNERSHIP OF PRODUCTION. (a) For the purpose of
determining the portions of production owned by the persons
owning interests in the pooled unit, the production shall be
allocated to the respective tracts within the unit in the
proportion that the number of surface acres included within each
tract bears to the number of surface acres included in the entire
unit.
(b) Notwithstanding the provisions in Subsection (a) of this
section, if the commission finds that allocation on a
surface-acreage basis does not allocate to each tract its fair
share, the commission shall allocate the production so that each
tract will receive its fair share, which for any nonconsenting
owner shall be no less than he would receive under a
surface-acreage allocation.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.052. DRILLING AND COMPLETION COSTS. (a) As to an
owner who elects not to pay his proportionate share of the
drilling and completion costs in advance, the commission shall
make provision in the pooling order for reimbursement solely out
of production, to the parties advancing the costs, of all actual
and reasonable drilling, completion, and operating costs plus a
charge for risk not to exceed 100 percent of the drilling and
completion costs.
(b) If there is a dispute relative to the costs, the commission
shall determine the proper costs and their allocation among
working interest owners after due notice to interested parties
and a hearing on the costs.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.053. EFFECT OF OPERATIONS. (a) The operations on and
production from any portion of a unit for which a pooling order
has been entered shall be considered for all purposes the conduct
of the operations on and production from each separately owned
tract in the pooled unit. If a gas well on a pooled unit is
shut-in, it shall be considered that the shut-in gas well is on
each separately owned tract in the pooled unit.
(b) If only part of a tract is included in the unit, operations
on, production from, or a shut-in gas well on the unit shall
maintain an oil and gas lease on the tract as to the part
excluded from the unit only if the lease would be maintained had
the unit been created voluntarily under the provisions of the
lease.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
SUBCHAPTER D. DISSOLUTION OF UNIT
Sec. 102.081. DISSOLVED WITH CONSENT OF OWNERS. A unit
established by order of the commission under this chapter may not
be modified or dissolved subsequently without the consent of all
mineral owners affected, except as necessary to permit its
enlargement as provided in Subchapter B of this chapter.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.082. AUTOMATIC DISSOLUTION. A unit is automatically
dissolved:
(1) one year after its effective date if no production or
drilling operations have been had on the unit;
(2) six months after the completion of a dry hole on the unit;
or
(3) six months after cessation of production from the unit.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.083. TERMINATION OF POOLED LEASE. On termination of a
lease pooled by order of the commission under authority granted
by this chapter, interests covered by the lease are considered
pooled as unleased mineral interests.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
SUBCHAPTER E. JUDICIAL REVIEW
Sec. 102.111. RIGHT TO APPEAL. A person affected by an order of
the commission adopted under the authority of this chapter is
entitled to judicial review of that order in a manner other than
by trial de novo.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 102.112. VENUE. Appeal shall be to the district court of
the county in which the land or any part of the land covered by
the order is located and not elsewhere, notwithstanding the
provisions of Sections 85.241 through 85.243 of this code.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.