AI-assisted research summary: A court may authorize an estate to commit royalty or mineral interests to pooling or unitization agreements if the existing leases do not adequately provide for it and the court makes specified findings.
Sec. 358.151. AUTHORIZATION FOR POOLING OR UNITIZATION. (a) If an existing lease or leases on property owned by an estate being administered do not adequately provide for pooling or unitization, the court in which the proceedings are pending may, in the manner provided by this subchapter, authorize the commitment of royalty or mineral interests in oil, liquid hydrocarbons, gas, gaseous elements, and other minerals, or any one or more of them, owned by the estate, to agreements that provide for the operation of areas as a pool or unit for the exploration for, development of, and production of all of those minerals, if the court finds that: (1) the pool or unit to which the agreement relates will be operated in a manner that protects correlative rights or prevents the physical or economic waste of oil, liquid hydrocarbons, gas, gaseous elements, or other minerals subject to the agreement; and (2) it is in the best interest of the estate to execute the agreement. (b) An agreement authorized under Subsection (a) may, among other things, provide that: (1) operations incident to the drilling of or production from a well on any portion of a pool or unit shall be considered for all purposes to be the conduct of operations on or production from each separately owned tract in the pool or unit; (2) any lease covering any part of the area committed to a pool or unit continues in effect in its entirety as long as: (A) oil, gas, or other minerals subject to the agreement are produced in paying quantities from any part of the pooled or unitized area; (B) operations are conducted as provided in the lease on any part of the pooled or unitized area; or (C) there is a shut-in gas well on any part of the pooled or unitized area, if the presence of the shut-in gas well is a ground for continuation of the lease under the terms of the lease; (3) the production allocated by the agreement to each tract included in a pool or unit shall, when produced, be considered for all purposes to have been produced from the tract by a well drilled on the tract; (4) the royalties provided for on production from any tract or portion of a tract within the pool or unit shall be paid only on that portion of the production allocated to the tract in accordance with the agreement; (5) the dry gas, before or after extraction of hydrocarbons, may be returned to a formation underlying any land or leases committed to the agreement, and that royalties are not required to be paid on the gas returned; and (6) gas obtained from other sources or other land may be injected into a formation underlying any land or leases committed to the agreement, and that royalties are not required to be paid on the gas injected when the gas is produced from the unit. Added by Acts 2009, 81st Leg., R.S., Ch. 680 (H.B. 2502), Sec. 1, eff. January 1, 2014.