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LSDefine
Simple English definitions for legal terms
pooling
Read a random definition: audit-letter response
A quick definition of pooling:
Pooling: When people who own small pieces of land or parts of a natural resource like oil or gas come together to combine their resources in order to drill a well. This is usually done to meet regulations about how far apart wells can be. Sometimes, pooling is done because a regulatory agency orders it, and other times it is done voluntarily by the owners of the resources.
A more thorough explanation:
Definition: Pooling is the process of bringing together small pieces of land or mineral interests to drill an oil or gas well. This is usually done to meet regulations for well-spacing. There are three types of pooling: voluntary, compulsory, and forced.
- Voluntary pooling: This is when the owners of mineral interests agree to pool their resources to drill a well. For example, if two neighboring landowners each own a small fraction of mineral rights over a producing reservoir, they may agree to pool their interests to drill a well together.
- Compulsory pooling: This is when a regulatory agency orders the pooling of mineral interests. For example, if a company wants to drill a well but cannot obtain enough land or mineral rights to meet well-spacing regulations, they may petition a regulatory agency to order compulsory pooling.
- Forced pooling: This is another term for compulsory pooling.
These examples illustrate how pooling can help companies and landowners work together to extract oil and gas resources more efficiently. By pooling their resources, they can meet regulatory requirements and increase their chances of success in drilling a well.