NATURAL RESOURCES CODE
CHAPTER 102. POOLING
SUBCHAPTER A. GENERAL PROVISIONS
§ 102.001. TITLE. This chapter may be cited as the
Mineral Interest Pooling Act.
Acts 1977, 65th Leg., p. 2570, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.002. DEFINITIONS. In this chapter:
(1) "Mineral" means and is limited to oil and gas.
(2) "Commission" means the Railroad Commission of
Texas.
Acts 1977, 65th Leg., p. 2570, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.003. APPLICATION TO CERTAIN RESERVOIRS. The
provisions of this chapter do not apply to any reservoir discovered
and produced before March 8, 1961.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.004. APPLICATION TO PUBLIC LAND. (a) The
provisions of this chapter do not apply to land owned by the State
of Texas nor to land in which the State of Texas has an interest
directly or indirectly.
(b) The provisions of this chapter do not amend, repeal,
change, alter, or affect in any manner the authority or
jurisdiction of the Commissioner of the General Land Office or the
State of Texas with respect to any land or interest in land in which
the Commissioner of the General Land Office has jurisdiction.
(c) The provisions of this chapter do not amend, repeal,
change, alter, or affect in any manner the authority, jurisdiction,
or consent of the Commissioner of the General Land Office on the
pooling of any interest now subject to the jurisdiction, authority,
or consent of the Commissioner of the General Land Office.
(d) With the approval or consent first obtained, or at the
instance of the Commissioner of the General Land Office, or any
board or agency having jurisdiction, the land in which the State of
Texas has an interest as described in this chapter may be pooled
under the provisions of this chapter.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 102.005 to 102.010 reserved for expansion]
SUBCHAPTER B. REQUIREMENTS AND PROCEDURE FOR POOLING
§ 102.011. AUTHORITY OF COMMISSION. When two or more
separately owned tracts of land are embraced in a common reservoir
of oil or gas for which the commission has established the size and
shape of proration units, whether by temporary or permanent field
rules, and where there are separately owned interests in oil and gas
within an existing or proposed proration unit in the common
reservoir and the owners have not agreed to pool their interests,
and where at least one of the owners of the right to drill has
drilled or has proposed to drill a well on the existing or proposed
proration unit to the common reservoir, the commission, on the
application of an owner specified in Section 102.012 of this code
and for the purpose of avoiding the drilling of unnecessary wells,
protecting correlative rights, or preventing waste, shall
establish a unit and pool all of the interests in the unit within an
area containing the approximate acreage of the proration unit,
which unit shall in no event exceed 160 acres for an oil well or 640
acres for a gas well plus 10 percent tolerance.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.012. OWNERS AUTHORIZED TO APPLY FOR POOLING. The
following interested owners may apply to the commission for the
pooling of mineral interests:
(1) the owner of any interest in oil and gas in an
existing proration unit or with respect to a proposed unit;
(2) the owner of any working interest; or
(3) any owner of an unleased tract other than a royalty
owner.
Acts 1977, 65th Leg., p. 2571, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.013. REQUIRED VOLUNTARY POOLING OFFER. (a) The
applicant shall set forth in detail the nature of voluntary pooling
offers made to the owners of the other interests in the proposed
unit.
(b) The commission shall dismiss the application if it finds
that a fair and reasonable offer to pool voluntarily has not been
made by the applicant.
(c) An offer by an owner of a royalty or any other interest
in oil or gas within an existing proration unit to share on the same
yardstick basis as the other owners within the existing proration
unit are then sharing shall be considered a fair and reasonable
offer.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.014. PRODUCTIVE ACREAGE EQUAL TO STANDARD
PRORATION UNIT. (a) The commission shall not require the owner of
a mineral interest, the productive acreage of which is equal to or
in excess of the standard proration unit for the reservoir, to pool
his interest with others unless requested by the holder of an
adjoining mineral interest, the productive acreage of which is
smaller than such pattern, who has not been provided a reasonable
opportunity to pool voluntarily.
(b) If the conditions specified in Subsection (a) of this
section exist, the commission shall pool the smaller tract with
adjacent acreage on a fair and reasonable basis and may authorize a
larger allowable for the unit if it exceeds the size of the standard
proration unit for the reservoir.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.015. PROHIBITED PROVISIONS IN OPERATING
AGREEMENT. A pooling agreement, offer to pool, or pooling order is
not considered fair and reasonable if it provides for an operating
agreement containing any of the following provisions:
(1) preferential right of the operator to purchase
mineral interests in the unit;
(2) a call on or option to purchase production from the
unit;
(3) operating charges that include any part of
district or central office expense other than reasonable overhead
charges; or
(4) prohibition against nonoperators questioning the
operation of the unit.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.016. NOTICE OF HEARING. On the filing of an
application for pooling of interests into a unit under the
provisions of this chapter, at least 30 days notice before hearing
on the application shall be given to all interested parties,
including notice by publication if there are unknown owners or
owners whose whereabouts are unknown. The notice shall be given in
the manner and form prescribed by the commission.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.017. POOLING ORDER. (a) After notice and
hearing, all orders effecting the pooling shall be made on terms and
conditions that are fair and reasonable and will afford the owner or
owners of each tract or interest in the unit the opportunity to
produce or receive his fair share.
(b) Each order shall:
(1) describe the land included in the unit,
identifying the reservoir to which it applies;
(2) designate the location of the well; and
(3) appoint an operator for the unit.
Acts 1977, 65th Leg., p. 2572, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.018. ACREAGE SUBJECT TO POOLING. The commission
shall pool only the acreage which at the time of its order
reasonably appears to lie within the productive limits of the
reservoir.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 102.019 to 102.050 reserved for expansion]
SUBCHAPTER C. RIGHTS IN A POOLED UNIT
§ 102.051. OWNERSHIP OF PRODUCTION. (a) For the
purpose of determining the portions of production owned by the
persons owning interests in the pooled unit, the production shall
be allocated to the respective tracts within the unit in the
proportion that the number of surface acres included within each
tract bears to the number of surface acres included in the entire
unit.
(b) Notwithstanding the provisions in Subsection (a) of
this section, if the commission finds that allocation on a
surface-acreage basis does not allocate to each tract its fair
share, the commission shall allocate the production so that each
tract will receive its fair share, which for any nonconsenting
owner shall be no less than he would receive under a surface-acreage
allocation.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.052. DRILLING AND COMPLETION COSTS. (a) As to an
owner who elects not to pay his proportionate share of the drilling
and completion costs in advance, the commission shall make
provision in the pooling order for reimbursement solely out of
production, to the parties advancing the costs, of all actual and
reasonable drilling, completion, and operating costs plus a charge
for risk not to exceed 100 percent of the drilling and completion
costs.
(b) If there is a dispute relative to the costs, the
commission shall determine the proper costs and their allocation
among working interest owners after due notice to interested
parties and a hearing on the costs.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.053. EFFECT OF OPERATIONS. (a) The operations
on and production from any portion of a unit for which a pooling
order has been entered shall be considered for all purposes the
conduct of the operations on and production from each separately
owned tract in the pooled unit. If a gas well on a pooled unit is
shut-in, it shall be considered that the shut-in gas well is on each
separately owned tract in the pooled unit.
(b) If only part of a tract is included in the unit,
operations on, production from, or a shut-in gas well on the unit
shall maintain an oil and gas lease on the tract as to the part
excluded from the unit only if the lease would be maintained had the
unit been created voluntarily under the provisions of the lease.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 102.054 to 102.080 reserved for expansion]
SUBCHAPTER D. DISSOLUTION OF UNIT
§ 102.081. DISSOLVED WITH CONSENT OF OWNERS. A unit
established by order of the commission under this chapter may not be
modified or dissolved subsequently without the consent of all
mineral owners affected, except as necessary to permit its
enlargement as provided in Subchapter B of this chapter.
Acts 1977, 65th Leg., p. 2573, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.082. AUTOMATIC DISSOLUTION. A unit is
automatically dissolved:
(1) one year after its effective date if no production
or drilling operations have been had on the unit;
(2) six months after the completion of a dry hole on
the unit; or
(3) six months after cessation of production from the
unit.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.083. TERMINATION OF POOLED LEASE. On termination
of a lease pooled by order of the commission under authority granted
by this chapter, interests covered by the lease are considered
pooled as unleased mineral interests.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 102.084 to 102.110 reserved for expansion]
SUBCHAPTER E. JUDICIAL REVIEW
§ 102.111. RIGHT TO APPEAL. A person affected by an
order of the commission adopted under the authority of this chapter
is entitled to judicial review of that order in a manner other than
by trial de novo.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 102.112. VENUE. Appeal shall be to the district court
of the county in which the land or any part of the land covered by
the order is located and not elsewhere, notwithstanding the
provisions of Sections 85.241 through 85.243 of this code.
Acts 1977, 65th Leg., p. 2574, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
