The pooling clause: combining your land with your neighbors'
A pooling clause lets the company combine your leased land with nearby tracts into one unit for a well. You are then paid on your share of the unit, usually your acres in the unit divided by the unit's total acres.
What it does
Pooling is common, and for a horizontal well it is often the only way your land gets drilled. The questions are how large a unit can be, what depths it covers, and whether you hear about it.
Printed forms usually set maximum unit sizes, then add that larger units are fine if a state regulator allows them. For horizontal wells that can make the size limits mean little.
Pooling and the Pugh clause work together. Without a Pugh clause, a unit that takes in part of your land can hold all of it.
What we mark on a review sheet
Normal
- Authority to pool for a well, with royalty shared by acres in the unit.
- A unit designation recorded in the county.
Missing
- Written notice to you of any unit, with a plat.
- A Pugh clause to release land outside the unit.
Ask about
- Pooling with no size limit, or limits that give way to anything a regulator allows.
- Authority to change a unit after production begins.
Questions to ask the company
- What is the largest unit you can form, and will you send me notice and a plat of any unit?
- Will pooling hold only the land and depths inside the unit?
- Will you record the unit designation in the county records?
Common questions
What does pooling mean in an oil and gas lease?
It lets the company combine your land with nearby tracts into one unit for a well. Your royalty is then based on your share of the unit.
Does pooling lower my royalty?
Your fraction stays the same, but it is multiplied by your share of the unit. A small tract in a large unit gets a small decimal on everything the unit produces.
Send it before you sign
Tell us what you got and what you want to know. We reply by email and tell you how to send the pages. A landman reads them and sends back a one-page review sheet.
Email hello@landman.review with what you got and your question, or call (307) 263-8515.