Kentucky 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. Kentucky Provisions That May Be Added to A Pooling Or Unit Designation: A Detailed Description In the state of Kentucky, pooling and unit designations play a crucial role in the efficient and equitable exploitation of oil and gas resources found within a particular area. These designations allow for the consolidation of multiple mineral rights into a combined entity, optimizing the extraction process and minimizing waste. To ensure fairness and efficiency, Kentucky has established provisions that can be added to a pooling or unit designation. Let's explore these provisions in detail. 1. Spacing: Spacing provisions dictate the distance between wells within a pooling or unit. The Kentucky Department of Natural Resources and Energy Development sets specific guidelines to ensure optimal production and prevent the wasteful drilling of excessive wells. These provisions aim to strike a balance between maximum resource recovery and environmental protection. 2. Minimum acreage requirement: A minimum acreage requirement is often necessary to form a pooling or unit designation. For example, Kentucky may stipulate that a unit must consist of at least 640 acres to be considered for consolidation. This provision ensures that only substantial tracts of land are combined, minimizing fragmentation and administrative complexities. 3. Pooling order hierarchy: In situations where landowners cannot reach a voluntary agreement for unitization, Kentucky has a provision known as pooling order hierarchy. This hierarchy outlines the priority for determining the working interest and production allocation among the non-consenting or dissenting mineral owners. It ensures that all parties are compensated fairly while promoting the efficient development of resources. 4. Adequate royalty protection: To protect the interests of landowners, Kentucky mandates provisions to ensure that they receive adequate royalties from the pooled or unitized production. These provisions establish fair royalty rates and conditions, preventing exploitation or unfair compensation. 5. Enhanced recovery techniques: Kentucky recognizes the importance of employing advanced recovery techniques when extracting oil and gas resources. Provisions may be added to pooling or unit designations to encourage the use of enhanced recovery methods such as hydraulic fracturing (fracking), horizontal drilling, and CO2 injection. These techniques maximize resource recovery while minimizing environmental impact. 6. Administrative arrangements: Kentucky provisions also address administrative procedures regarding pooling or unit designations. These may include the submission of applications, the formation of committees or boards to oversee unit operations, and the establishment of reporting requirements. Such provisions ensure that operations are conducted transparently and in compliance with regulatory standards. Different Types of Kentucky Provisions: — Spacing regulations for a pooling or unit designation — Minimum acreage requirement for unit formation — Pooling order hierarchy for non-consenting mineral owners — Royalty protection provision— - Enhanced recovery techniques encouragement — Administrative arrangements for compliance and reporting It is important to note that the specific details and requirements of these provisions may be subject to change or modification over time. Landowners and operators are advised to consult with the Kentucky Department of Natural Resources and Energy Development or legal professionals for the most up-to-date information and guidance on Kentucky pooling or unit designations.

Kentucky Provisions That May Be Added to A Pooling Or Unit Designation: A Detailed Description In the state of Kentucky, pooling and unit designations play a crucial role in the efficient and equitable exploitation of oil and gas resources found within a particular area. These designations allow for the consolidation of multiple mineral rights into a combined entity, optimizing the extraction process and minimizing waste. To ensure fairness and efficiency, Kentucky has established provisions that can be added to a pooling or unit designation. Let's explore these provisions in detail. 1. Spacing: Spacing provisions dictate the distance between wells within a pooling or unit. The Kentucky Department of Natural Resources and Energy Development sets specific guidelines to ensure optimal production and prevent the wasteful drilling of excessive wells. These provisions aim to strike a balance between maximum resource recovery and environmental protection. 2. Minimum acreage requirement: A minimum acreage requirement is often necessary to form a pooling or unit designation. For example, Kentucky may stipulate that a unit must consist of at least 640 acres to be considered for consolidation. This provision ensures that only substantial tracts of land are combined, minimizing fragmentation and administrative complexities. 3. Pooling order hierarchy: In situations where landowners cannot reach a voluntary agreement for unitization, Kentucky has a provision known as pooling order hierarchy. This hierarchy outlines the priority for determining the working interest and production allocation among the non-consenting or dissenting mineral owners. It ensures that all parties are compensated fairly while promoting the efficient development of resources. 4. Adequate royalty protection: To protect the interests of landowners, Kentucky mandates provisions to ensure that they receive adequate royalties from the pooled or unitized production. These provisions establish fair royalty rates and conditions, preventing exploitation or unfair compensation. 5. Enhanced recovery techniques: Kentucky recognizes the importance of employing advanced recovery techniques when extracting oil and gas resources. Provisions may be added to pooling or unit designations to encourage the use of enhanced recovery methods such as hydraulic fracturing (fracking), horizontal drilling, and CO2 injection. These techniques maximize resource recovery while minimizing environmental impact. 6. Administrative arrangements: Kentucky provisions also address administrative procedures regarding pooling or unit designations. These may include the submission of applications, the formation of committees or boards to oversee unit operations, and the establishment of reporting requirements. Such provisions ensure that operations are conducted transparently and in compliance with regulatory standards. Different Types of Kentucky Provisions: — Spacing regulations for a pooling or unit designation — Minimum acreage requirement for unit formation — Pooling order hierarchy for non-consenting mineral owners — Royalty protection provision— - Enhanced recovery techniques encouragement — Administrative arrangements for compliance and reporting It is important to note that the specific details and requirements of these provisions may be subject to change or modification over time. Landowners and operators are advised to consult with the Kentucky Department of Natural Resources and Energy Development or legal professionals for the most up-to-date information and guidance on Kentucky pooling or unit designations.