Commission approval is required before pooled-unit and cooperative-facilities agreements become legal or effective.
Sec. 101.013. COMMISSION APPROVAL. (a) Agreements for pooled units and cooperative facilities are not legal or effective until the commission finds, after application, notice, and hearing: (1) that the agreement is necessary to accomplish the purposes specified in Section 101.011 of this code; (2) that it is in the interest of the public welfare as being reasonably necessary to prevent waste and to promote the conservation of oil or gas or both; (3) that the rights of the owners of all the interests in the field, whether signers of the unit agreement or not, would be protected under its operation; (4) that the estimated additional cost, if any, of conducting the operation will not exceed the value of additional oil and gas so recovered, by or on behalf of the several persons affected, including royalty owners, owners of overriding royalties, oil and gas payments, carried interests, lien claimants, and others as well as the lessees; (5) that other available or existing methods or facilities for secondary recovery operations or for the conservation and utilization of gas in the particular area or field concerned or for both are inadequate for the purposes; and (6) that the area covered by the unit agreement contains only that part of the field that has reasonably been defined by development, and that the owners of interests in the oil and gas under each tract of land in the area reasonably defined by development are given an opportunity to enter into the unit on the same yardstick basis as the owners of interests in the oil and gas under the other tracts in the unit. (b) A finding by the commission that the area described in the unit agreement is insufficient or covers more acreage than is necessary to accomplish the purposes of this chapter is grounds for the disapproval of the agreement. Acts 1977, 65th Leg., p. 2568, ch. 871, art. I, Sec. 1, eff. Sept. 1, 1977.