The secretary must set drilling units for pools and designate well locations, while rules cannot force extra wells or cause net drainage to make a producer get more than the producer’s just and equitable share.
§9. Production from pool; drilling units; equitable share; rules and regulations A. Whether or not the total production from a pool be limited or prorated, no rule, regulation, or order of the secretary shall in terms or effect: (1) Make it necessary for the producer from, or the owner of, a tract of land in the pool, in order that he may obtain the tract's just and equitable share of the production of the pool, as that share is set forth in this Section, to drill and operate any well or wells on the tract in addition to the well or wells that can without waste produce this share, or (2) Occasion net drainage from a tract unless there be drilled and operated upon the tract a well or wells in addition to the well or wells thereon that can without waste produce the tract's just and equitable share of the production of the pool. B. For the prevention of waste and to avoid the drilling of unnecessary wells, the secretary shall establish a drilling unit or units for each pool, except for those pools which, prior to July 31, 1940, had been developed to an extent and where conditions exist making it impracticable or unreasonable to use a drilling unit at the present stage of development. A drilling unit, as contemplated herein, means the maximum area which may be efficiently and economically drained by the well or wells designated to serve the drilling unit as the unit well, substitute unit well, or alternate unit well. This unit shall constitute a developed area as long as a well is located thereon which is capable of producing oil, gas, or brine in paying quantities. C. Each well permitted to be drilled upon a drilling unit hereafter established shall be drilled at the location designated by the secretary, after public hearing, in the order creating the unit. The secretary shall consider all available geological and engineering evidence and shall provide for the unit well to be located at the optimum position in the drilling unit for the most efficient and economic drainage of such unit with such exceptions as may be reasonably necessary where topographical conditions exist that would make such a location of the unit well unduly burdensome or where the designated unit well was drilled or commenced prior to the creation of the drilling unit; provided, however, the secretary shall fix the well location for each drilling unit so that the producer thereof shall be allowed to produce no more than his just and equitable share of the oil and gas in the pool, as this share is set forth in this Section. D. Subject to the reasonable necessities for the prevention of waste, and to reasonable adjustment because of structural position, a producer's just and equitable share of the oil, gas, or brine in the pool, also referred to as a tract's just and equitable share, is that part of the authorized production of the pool, whether it be the total which could be produced without any restriction on the amount of production or whether it be an amount less than that which the pool could produce if no restriction on amount were imposed, which is substantially in the proportion that the quantity of recoverable oil, gas, or brine in the developed area of his tract or tracts in the pool bears to the recoverable oil, gas, or brine in the total developed area of the pool, insofar as these amounts can be practically ascertained. To that end, the rules, regulations, and orders of the secretary shall be such as will prevent or minimize reasonably avoidable net drainage from each developed area, that is, drainage not equalized by counter drainage, and will give to each producer the opportunity to use his just and equitable share of the production. In determining each producer's just and equitable share of the production authorized for the pool, the secretary is authorized to give due consideration to the productivity of the well or wells located thereon, as determined by flow tests, bottom hole pressure tests, or any other practical method of testing wells and producing structures, and to consider other factors and geological and engineering tests and data as may be determined by the secretary to be pertinent or relevant to ascertaining each producer's just and equitable share of the production of the field or pool. E. Repealed by Acts 1984, No. 768, §2. Amended by Acts 1960, No. 442, §1; Acts 1980, No. 758, §1. Acts 1984, No. 768, §2; Acts 2015, No. 253, §1; Acts 2024, No. 126, §1; Acts 2025, No. 458, §1, eff. Oct. 1, 2025.