North Carolina 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. North Carolina Provisions That May Be Added to A Pooling Or Unit Designation A pooling or unit designation is an important aspect of oil and gas operations, including in North Carolina. In North Carolina, specific provisions may be added to a pooling or unit designation to ensure the effective and efficient extraction of hydrocarbons from a particular geologic formation or reservoir. These provisions aim to promote fair and equitable distribution of royalties, minimize waste, and protect the rights and interests of all parties involved. 1. Compulsory Pooling Provision: This provision enables operators to include non-consenting mineral owners within a designated pool or unit. It ensures that all owners within the unit share in the resulting production and receive their fair share of royalties, encouraging the overall development and maximization of resources. 2. Integration Provision: The integration provision allows for the integration of multiple leases or units within a designated area, facilitating the efficient extraction of hydrocarbons. It ensures that all leases within the integrated unit contribute to the overall production and receive proportionate royalties. 3. Allocation and Sharing Provision: This provision outlines the methodology for allocating and sharing production and royalties among the various leases or owners within a designated pool or unit. It ensures that each owner receives an equitable share based on their proportionate contribution to the production. 4. Unitization Provision: Unitization involves the consolidation of adjacent leases or units into a single productive unit. This provision allows for the efficient development of a larger area, maximizing resource recovery. It typically involves the formation of a unit operating agreement that defines the rights, responsibilities, and financial interests of the affected parties. 5. Pooling Order Provision: A pooling order is issued by the state regulatory agency, granting the authority to pool or unitize leases or units. This provision ensures compliance with state regulations and enables the implementation of the pooling or unitization provisions within the designated area. 6. Minimum Royalty Provision: This provision protects the interests of royalty owners by establishing a minimum royalty rate that must be paid regardless of the actual production or revenue generated. It provides a guaranteed income stream even during periods of low production or market downturns. 7. Continuous Development Provision: This provision sets forth requirements for continuous development and operations within a designated pool or unit. It aims to prevent speculative holding of leases without active exploitation, ensuring the efficient use of resources. 8. Well Spacing Provision: Well spacing provisions regulate the distance and density between wells within a designated pool or unit. They aim to prevent interference between adjacent wells, optimize reservoir drainage, and prevent waste by avoiding excessive drilling. These are some of the key provisions that may be added to a pooling or unit designation in North Carolina. Understanding and compliance with these provisions are crucial for the responsible development and management of oil and gas resources while protecting the rights and interests of all stakeholders involved.

North Carolina Provisions That May Be Added to A Pooling Or Unit Designation A pooling or unit designation is an important aspect of oil and gas operations, including in North Carolina. In North Carolina, specific provisions may be added to a pooling or unit designation to ensure the effective and efficient extraction of hydrocarbons from a particular geologic formation or reservoir. These provisions aim to promote fair and equitable distribution of royalties, minimize waste, and protect the rights and interests of all parties involved. 1. Compulsory Pooling Provision: This provision enables operators to include non-consenting mineral owners within a designated pool or unit. It ensures that all owners within the unit share in the resulting production and receive their fair share of royalties, encouraging the overall development and maximization of resources. 2. Integration Provision: The integration provision allows for the integration of multiple leases or units within a designated area, facilitating the efficient extraction of hydrocarbons. It ensures that all leases within the integrated unit contribute to the overall production and receive proportionate royalties. 3. Allocation and Sharing Provision: This provision outlines the methodology for allocating and sharing production and royalties among the various leases or owners within a designated pool or unit. It ensures that each owner receives an equitable share based on their proportionate contribution to the production. 4. Unitization Provision: Unitization involves the consolidation of adjacent leases or units into a single productive unit. This provision allows for the efficient development of a larger area, maximizing resource recovery. It typically involves the formation of a unit operating agreement that defines the rights, responsibilities, and financial interests of the affected parties. 5. Pooling Order Provision: A pooling order is issued by the state regulatory agency, granting the authority to pool or unitize leases or units. This provision ensures compliance with state regulations and enables the implementation of the pooling or unitization provisions within the designated area. 6. Minimum Royalty Provision: This provision protects the interests of royalty owners by establishing a minimum royalty rate that must be paid regardless of the actual production or revenue generated. It provides a guaranteed income stream even during periods of low production or market downturns. 7. Continuous Development Provision: This provision sets forth requirements for continuous development and operations within a designated pool or unit. It aims to prevent speculative holding of leases without active exploitation, ensuring the efficient use of resources. 8. Well Spacing Provision: Well spacing provisions regulate the distance and density between wells within a designated pool or unit. They aim to prevent interference between adjacent wells, optimize reservoir drainage, and prevent waste by avoiding excessive drilling. These are some of the key provisions that may be added to a pooling or unit designation in North Carolina. Understanding and compliance with these provisions are crucial for the responsible development and management of oil and gas resources while protecting the rights and interests of all stakeholders involved.