This Designation is executed by the Operator and Working Interest Owners and filed of record for the purpose of evidencing their election to exercise the pooling authority granted to the lessees in the Leases, to give notice of the Unit being established, and to identify and describe the lands included in the Unit.
Alabama Designation of Pooled Unit and Declaration of Pooling for Oil or Gas refers to the legal agreement and process by which multiple oil or gas leases or tracts of land are combined into a single unit for the purpose of exploration, development, and production of oil or gas. This pooling mechanism allows production to be more efficient and cost-effective. In Alabama, there are various types of Designation of Pooled Unit and Declaration of Pooling for Oil or Gas, including: 1. Voluntary Pooling: This type of pooling occurs when the owners or leaseholders of separate oil or gas tracts voluntarily agree to combine their interests into a single unit. This agreement is usually reached to maximize production and minimize costs. 2. Compulsory Pooling: Compulsory pooling, also known as mandatory or forced pooling, is when the interests of non-consenting owners or leaseholders are combined with those who have agreed to pool. This compulsory pooling can occur when a certain percentage of owners (typically a majority) in a drilling unit have agreed to the pooling, while other owners have declined or failed to respond. 3. Lease Integration: Lease integration occurs when the interests of multiple leases are combined into a single unit. This happens when the leases are owned or controlled by the same entity or when separate leases have common rights, provisions, or interests. The Alabama Designation of Pooled Unit and Declaration of Pooling for Oil or Gas involves a detailed legal process. The agreement typically includes provisions regarding: — Designated Unit: The defined area of land that will be subject to pooling, including the legal description, boundaries, and dimensions. — Pooling Working Interest: The proportionate share of each leaseholder's working interest in the pooled unit. — Royalty Interest: The percentage or fraction of the oil or gas production that each leaseholder is entitled to receive as royalty. — Drilling Obligations: The obligations of the operator to drill and develop the pooled unit within a certain timeframe or according to specified conditions. — Well Spacing: The minimum distance requirements between wells within the pooled unit to ensure optimal resource recovery and prevent interference. — Allocation and Distribution: The methods for allocating costs, expenses, production, and proceeds among the leaseholders in the pooled unit. — Termination: The conditions or events that may lead to the termination or modification of the pooling agreement. It is important for owners or leaseholders to understand the implications and potential benefits of Alabama Designation of Pooled Unit and Declaration of Pooling for Oil or Gas, as it can affect their ownership rights, royalties, and obligations. Legal advice should be sought to ensure compliance with applicable laws and regulations, as well as to protect individual interests within the pooled unit.
