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.
The New York Designation of Pooled Unit and Declaration of Pooling for Oil or Gas is a crucial legal process in the state of New York related to oil and gas exploration and production. This procedure allows for the efficient and effective extraction of hydrocarbons by consolidating multiple oil or gas leases into a unified production unit. By designating a pooled unit, operators can maximize resource recovery while minimizing surface disruption. There are two primary types of New York Designation of Pooled Unit and Declaration of Pooling for Oil or Gas: 1. Mandatory Pooled Unit: In certain cases, the New York State Department of Environmental Conservation (DEC) may require the creation of a mandatory pooled unit. This occurs when a lease is deemed unworkable or uneconomical by itself but can be made productive by combining it with other leases. The mandatory pooling process ensures that all mineral rights owners receive fair compensation for the resources extracted within the pooled unit. 2. Voluntary Pooled Unit: This type of pooling occurs when operators voluntarily decide to combine multiple leases or parcels of land to form a single productive unit. It is a strategic approach to streamline operations and maximize production efficiencies. Operators may choose to create voluntary pooled units to cohesively develop contiguous areas and share production costs, equipment, and infrastructure. To initiate the New York Designation of Pooled Unit and Declaration of Pooling for Oil or Gas, various steps must be followed: 1. Notice: The operator wishing to establish a pooled unit must provide written notice to all leaseholders affected by the pooling plan. The notice must provide details about the proposed pooled unit, representation of their rights, and the timeframe for any objections. 2. Objections and Hearing: Leaseholders who object to the pooling plan must file their objections with the DEC. A hearing is then conducted to evaluate these objections and determine if pooling is in the best interest of all stakeholders involved. 3. DEC Decision: After considering objections, the DEC will make a determination regarding the creation of the pooled unit. If approved, a Designation of Pooled Unit and Declaration of Pooling will be issued, outlining the terms and conditions of the pooled unit. 4. Compensation and Royalties: The pooling plan establishes a fair method for distributing pooled unit revenues among leaseholders. This includes determining how royalties and compensation for oil or gas production are divided, ensuring equitable treatment for all stakeholders. By implementing the New York Designation of Pooled Unit and Declaration of Pooling for Oil or Gas, the state aims to strike a balance between efficient resource recovery and protecting the rights and interests of mineral rights owners. This process promotes responsible and sustainable oil or gas development while mitigating potential conflicts among leaseholders and operators.
