§ 45.1-361.21. Pooling of interests in drilling units.
A. The Board, upon application from any gas or oil owner, shall enter anorder pooling all interests in the drilling unit for the development andoperation thereof when:
1. Two or more separately owned tracts are embraced in a drilling unit;
2. There are separately owned interests in all or part of any such drillingunit and those having interests have not agreed to pool their interests; or
3. There are separately owned tracts embraced within the minimum statewidespacing requirements prescribed in § 45.1-361.17.
However, no pooling order shall be entered until the notice and hearingrequirements of this article have been satisfied.
B. Subject to any contrary provision contained in a gas or oil leaserespecting the property, gas or oil operations incident to the drilling of awell on any portion of a unit covered by a pooling order shall be deemed tobe the conduct of such operations on each tract in the unit. The portion ofproduction allocated to any tract covered by a pooling order shall be in thesame proportion as the acreage of that tract bears to the total acreage ofthe unit.
C. All pooling orders entered by the Board pursuant to the provisions of thissection shall:
1. Authorize the drilling and operation of a well, including the stimulationof all coal seams in the case of a coalbed methane well when authorizedpursuant to clause (iii) of subdivision 2 b of subsection F of § 45.1-361.29,subject to the permit provisions contained in Article 3 (§ 45.1-361.27 etseq.) of this chapter;
2. Include the time and date when such order expires;
3. Designate the gas or oil owner who is authorized to drill and operate thewell; provided, however, that except in the case of coalbed methane gaswells, the designated operators must have the right to conduct operations orhave the written consent of owners with the right to conduct operations on atleast 25% of the acreage included in the unit;
4. Prescribe the conditions under which gas or oil owners may becomeparticipating operators or exercise their rights of election undersubdivision 7 of this subsection;
5. Establish the sharing of all reasonable costs, including a reasonablesupervision fee, between participating operators so that each participatingoperator pays the same percentage of such costs as his acreage bears to thetotal unit acreage;
6. Require that nonleasing gas or oil owners be provided with reasonableaccess to unit records submitted to the Director or Inspector;
7. Establish a procedure for a gas or oil owner who received notice of thehearing and who does not decide to become a participating operator may electeither to (i) sell or lease his gas or oil ownership to a participatingoperator, (ii) enter into a voluntary agreement to share in the operation ofthe well at a rate of payment mutually agreed to by the gas or oil owner andthe gas or oil operator authorized to drill the well, or (iii) share in theoperation of the well as a nonparticipating operator on a carried basis afterthe proceeds allocable to his share equal the following:
a. In the case of a leased tract, 300 percent of the share of such costsallocable to his interest; or
b. In the case of an unleased tract, 200 percent of the share of such costsallocable to his interest.
D. Any gas or oil owner whose identity and location remain unknown at theconclusion of a hearing concerning the establishment of a pooling order forwhich public notice was given shall be deemed to have elected to lease hisinterest to the gas or oil operator at a rate to be established by the Board.The Board shall cause to be established an escrow account into which theunknown lessor's share of proceeds shall be paid and held for his benefit.Such escrowed proceeds shall be deemed to be unclaimed property and shall bedisposed of pursuant to the provisions of the Uniform Disposition ofUnclaimed Property Act (§ 55-210.1 et seq.). Upon discovery of the identityand location of any unknown owner subject to escrow under the provisions ofthis subsection and not subject to conflicting claims of ownership, thedesignated operator shall, within 30 days, file with the Board a petition fordisbursement of funds to be considered at the next available hearing. Thepetition shall include a detailed accounting of all funds deposited in escrowthat are subject to the proposed disbursement.
E. Any person who does not make an election under the pooling order shall bedeemed to have leased his gas or oil interest to the gas or oil well operatoras the pooling order may provide.
F. Should a gas or oil owner be a person under a disability, the applicantfor a pooling order may petition the appropriate circuit court to appoint aguardian ad litem pursuant to the provisions of § 8.01-261 for purposes ofmaking the election provided for by this section.
G. Any royalty or overriding royalty reserved in any lease which is deductedfrom a nonparticipating operator's share of production shall not be subjectto charges for operating costs but shall be separately calculated and paid tothe royalty owner.
H. The Board shall resolve all disputes arising among gas or oil operatorsregarding the amount and reasonableness of well operation costs. The Boardshall, by regulation, establish allowable types of costs which may be sharedin pooled gas or oil operations.
(1982, c. 347, § 45.1-302; 1987, c. 452; 1989, c. 529; 1990, c. 92; 1995, c.269; 1996, c. 854; 2006, c. 498.)
§ 45.1-361.21. Pooling of interests in drilling units.
A. The Board, upon application from any gas or oil owner, shall enter anorder pooling all interests in the drilling unit for the development andoperation thereof when:
1. Two or more separately owned tracts are embraced in a drilling unit;
2. There are separately owned interests in all or part of any such drillingunit and those having interests have not agreed to pool their interests; or
3. There are separately owned tracts embraced within the minimum statewidespacing requirements prescribed in § 45.1-361.17.
However, no pooling order shall be entered until the notice and hearingrequirements of this article have been satisfied.
B. Subject to any contrary provision contained in a gas or oil leaserespecting the property, gas or oil operations incident to the drilling of awell on any portion of a unit covered by a pooling order shall be deemed tobe the conduct of such operations on each tract in the unit. The portion ofproduction allocated to any tract covered by a pooling order shall be in thesame proportion as the acreage of that tract bears to the total acreage ofthe unit.
C. All pooling orders entered by the Board pursuant to the provisions of thissection shall:
1. Authorize the drilling and operation of a well, including the stimulationof all coal seams in the case of a coalbed methane well when authorizedpursuant to clause (iii) of subdivision 2 b of subsection F of § 45.1-361.29,subject to the permit provisions contained in Article 3 (§ 45.1-361.27 etseq.) of this chapter;
2. Include the time and date when such order expires;
3. Designate the gas or oil owner who is authorized to drill and operate thewell; provided, however, that except in the case of coalbed methane gaswells, the designated operators must have the right to conduct operations orhave the written consent of owners with the right to conduct operations on atleast 25% of the acreage included in the unit;
4. Prescribe the conditions under which gas or oil owners may becomeparticipating operators or exercise their rights of election undersubdivision 7 of this subsection;
5. Establish the sharing of all reasonable costs, including a reasonablesupervision fee, between participating operators so that each participatingoperator pays the same percentage of such costs as his acreage bears to thetotal unit acreage;
6. Require that nonleasing gas or oil owners be provided with reasonableaccess to unit records submitted to the Director or Inspector;
7. Establish a procedure for a gas or oil owner who received notice of thehearing and who does not decide to become a participating operator may electeither to (i) sell or lease his gas or oil ownership to a participatingoperator, (ii) enter into a voluntary agreement to share in the operation ofthe well at a rate of payment mutually agreed to by the gas or oil owner andthe gas or oil operator authorized to drill the well, or (iii) share in theoperation of the well as a nonparticipating operator on a carried basis afterthe proceeds allocable to his share equal the following:
a. In the case of a leased tract, 300 percent of the share of such costsallocable to his interest; or
b. In the case of an unleased tract, 200 percent of the share of such costsallocable to his interest.
D. Any gas or oil owner whose identity and location remain unknown at theconclusion of a hearing concerning the establishment of a pooling order forwhich public notice was given shall be deemed to have elected to lease hisinterest to the gas or oil operator at a rate to be established by the Board.The Board shall cause to be established an escrow account into which theunknown lessor's share of proceeds shall be paid and held for his benefit.Such escrowed proceeds shall be deemed to be unclaimed property and shall bedisposed of pursuant to the provisions of the Uniform Disposition ofUnclaimed Property Act (§ 55-210.1 et seq.). Upon discovery of the identityand location of any unknown owner subject to escrow under the provisions ofthis subsection and not subject to conflicting claims of ownership, thedesignated operator shall, within 30 days, file with the Board a petition fordisbursement of funds to be considered at the next available hearing. Thepetition shall include a detailed accounting of all funds deposited in escrowthat are subject to the proposed disbursement.
E. Any person who does not make an election under the pooling order shall bedeemed to have leased his gas or oil interest to the gas or oil well operatoras the pooling order may provide.
F. Should a gas or oil owner be a person under a disability, the applicantfor a pooling order may petition the appropriate circuit court to appoint aguardian ad litem pursuant to the provisions of § 8.01-261 for purposes ofmaking the election provided for by this section.
G. Any royalty or overriding royalty reserved in any lease which is deductedfrom a nonparticipating operator's share of production shall not be subjectto charges for operating costs but shall be separately calculated and paid tothe royalty owner.
H. The Board shall resolve all disputes arising among gas or oil operatorsregarding the amount and reasonableness of well operation costs. The Boardshall, by regulation, establish allowable types of costs which may be sharedin pooled gas or oil operations.
(1982, c. 347, § 45.1-302; 1987, c. 452; 1989, c. 529; 1990, c. 92; 1995, c.269; 1996, c. 854; 2006, c. 498.)
§ 45.1-361.21. Pooling of interests in drilling units.
A. The Board, upon application from any gas or oil owner, shall enter anorder pooling all interests in the drilling unit for the development andoperation thereof when:
1. Two or more separately owned tracts are embraced in a drilling unit;
2. There are separately owned interests in all or part of any such drillingunit and those having interests have not agreed to pool their interests; or
3. There are separately owned tracts embraced within the minimum statewidespacing requirements prescribed in § 45.1-361.17.
However, no pooling order shall be entered until the notice and hearingrequirements of this article have been satisfied.
B. Subject to any contrary provision contained in a gas or oil leaserespecting the property, gas or oil operations incident to the drilling of awell on any portion of a unit covered by a pooling order shall be deemed tobe the conduct of such operations on each tract in the unit. The portion ofproduction allocated to any tract covered by a pooling order shall be in thesame proportion as the acreage of that tract bears to the total acreage ofthe unit.
C. All pooling orders entered by the Board pursuant to the provisions of thissection shall:
1. Authorize the drilling and operation of a well, including the stimulationof all coal seams in the case of a coalbed methane well when authorizedpursuant to clause (iii) of subdivision 2 b of subsection F of § 45.1-361.29,subject to the permit provisions contained in Article 3 (§ 45.1-361.27 etseq.) of this chapter;
2. Include the time and date when such order expires;
3. Designate the gas or oil owner who is authorized to drill and operate thewell; provided, however, that except in the case of coalbed methane gaswells, the designated operators must have the right to conduct operations orhave the written consent of owners with the right to conduct operations on atleast 25% of the acreage included in the unit;
4. Prescribe the conditions under which gas or oil owners may becomeparticipating operators or exercise their rights of election undersubdivision 7 of this subsection;
5. Establish the sharing of all reasonable costs, including a reasonablesupervision fee, between participating operators so that each participatingoperator pays the same percentage of such costs as his acreage bears to thetotal unit acreage;
6. Require that nonleasing gas or oil owners be provided with reasonableaccess to unit records submitted to the Director or Inspector;
7. Establish a procedure for a gas or oil owner who received notice of thehearing and who does not decide to become a participating operator may electeither to (i) sell or lease his gas or oil ownership to a participatingoperator, (ii) enter into a voluntary agreement to share in the operation ofthe well at a rate of payment mutually agreed to by the gas or oil owner andthe gas or oil operator authorized to drill the well, or (iii) share in theoperation of the well as a nonparticipating operator on a carried basis afterthe proceeds allocable to his share equal the following:
a. In the case of a leased tract, 300 percent of the share of such costsallocable to his interest; or
b. In the case of an unleased tract, 200 percent of the share of such costsallocable to his interest.
D. Any gas or oil owner whose identity and location remain unknown at theconclusion of a hearing concerning the establishment of a pooling order forwhich public notice was given shall be deemed to have elected to lease hisinterest to the gas or oil operator at a rate to be established by the Board.The Board shall cause to be established an escrow account into which theunknown lessor's share of proceeds shall be paid and held for his benefit.Such escrowed proceeds shall be deemed to be unclaimed property and shall bedisposed of pursuant to the provisions of the Uniform Disposition ofUnclaimed Property Act (§ 55-210.1 et seq.). Upon discovery of the identityand location of any unknown owner subject to escrow under the provisions ofthis subsection and not subject to conflicting claims of ownership, thedesignated operator shall, within 30 days, file with the Board a petition fordisbursement of funds to be considered at the next available hearing. Thepetition shall include a detailed accounting of all funds deposited in escrowthat are subject to the proposed disbursement.
E. Any person who does not make an election under the pooling order shall bedeemed to have leased his gas or oil interest to the gas or oil well operatoras the pooling order may provide.
F. Should a gas or oil owner be a person under a disability, the applicantfor a pooling order may petition the appropriate circuit court to appoint aguardian ad litem pursuant to the provisions of § 8.01-261 for purposes ofmaking the election provided for by this section.
G. Any royalty or overriding royalty reserved in any lease which is deductedfrom a nonparticipating operator's share of production shall not be subjectto charges for operating costs but shall be separately calculated and paid tothe royalty owner.
H. The Board shall resolve all disputes arising among gas or oil operatorsregarding the amount and reasonableness of well operation costs. The Boardshall, by regulation, establish allowable types of costs which may be sharedin pooled gas or oil operations.
(1982, c. 347, § 45.1-302; 1987, c. 452; 1989, c. 529; 1990, c. 92; 1995, c.269; 1996, c. 854; 2006, c. 498.)
