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RULE §3.40Assignment of Acreage to Pooled Development and Proration Units

(a) An operator may pool acreage, in accordance with appropriate contractual authority and applicable field rules, for the purpose of creating a drilling unit or proration unit by filing an original certified plat delineating the pooled unit and a Certificate of Pooling Authority, Form P-12 (revised 5/2001), according to the following requirements:

  (1) Each tract in the certified plat shall be identified with an outline and a tract identifier that corresponds to the tract identifier listed on the Form P-12.

  (2) The operator shall provide information on the Certificate of Pooling Authority, Form P-12, accurately and according to the instructions on the form.

    (A) The operator shall separately list each tract committed to the pooled unit by authority granted to the operator.

    (B) For each tract listed on Form P-12, the operator shall state the number of acres contained within the tract. The operator shall indicate by checking the appropriate box on Form P-12 if, within an individual tract, there exists a non-pooled and/or unleased interest.

    (C) The operator shall state on Form P-12 the total number of acres in the pooled unit. The total number of acres in the pooled unit shall equal the sum of all acres in each individual tract listed.

    (D) If a pooled unit contains more tracts than can be listed on a single Form P-12, the operator shall file as many additional Forms P-12 as necessary to list each pooled tract individually. The additional Forms P-12 shall be numbered in sequence.

    (E) The operator shall provide the requested identification and contact information on the Form P-12.

    (F) The operator shall certify the information on the Form P-12 by signing and dating the form.

  (3) Failure to timely file the required information on the certified plat or the Form P-12 may result in the dismissal of the W-1 application. "Timely" means within three months of the Commission notifying the operator of the need for additional information on the certified plat and/or the Form P-12.

  (4) The operator shall file the original certified plat and Form P-12 at the Commission's Austin office. The operator shall file a copy of the certified plat and Form P-12 with the appropriate Commission district office or offices. If the operator files electronically through the Commission's Electronic Compliance and Approval Process (ECAP) system, the operator is not required to file additional paper copies in the appropriate Commission district office, because all Commission offices will have electronic access to the Form P-12 and certified plat.

  (5) The operator shall file the Form P-12 and certified plat:

    (A) with the drilling permit application when two or more tracts are joined to form a pooled unit for Commission purposes to obtain a drilling permit;

    (B) with completion paperwork when the pooled unit's acreage is being used or assigned for allowable purposes;

    (C) to designate a pooled unit formed after completion paperwork has been filed when the pooled unit's acreage is being used or assigned for allowable purposes; or

    (D) to designate a change in a pooled unit previously recognized by the Commission. The operator shall file any changes to a pooled unit in accordance with the requirements of §3.38(d)(3) of this title, relating to Well Densities.

(b) If a tract to be pooled has an outstanding interest for which pooling authority does not exist, the tract may be assigned to a unit where authority exists in the remaining undivided interest, provided, that total gross acreage in the tract is included for allocation purposes, and the certificate filed with the commission shows that a certain undivided interest is outstanding in the tract. The commission will not allow an operator to assign only his undivided interest out of a basic tract, where a nonpooled interest exists.

(c) The nonpooled undivided interest holder retains his development rights in his basic tract, and should such rights be exercised, authority to develop the basic tract be approved by the commission, and a well completed as a producer thereon, then the entire interest in the basic tract must be allocated to said well, and any interest insofar as it is pooled with another tract must be assigned to the well on the basic tract for allocation purposes. Splitting of undivided interest in a basic tract between two or more wells on two or more tracts is not acceptable.

(d) Acreage assigned to a well for drilling and development, or for allocation of allowable, shall not be assigned to any other well or wells projected to or completed in the same reservoir; such duplicate assignment of acreage is not acceptable, provided, however, that this limitation shall not prevent the reformation of development or proration units so long as no duplicate assignment of acreage occurs, and further, that such reformation does not violate other conservation regulations.

Source Note: The provisions of this §3.40 adopted to be effective January 1, 1976; amended to be effective January 9, 2002, 27 TexReg 150

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