Know About Oil and Gas Unitization and Pooling

Before going to know what exactly oil and gas unitization and pooling are let us see the purpose of doing these things while extracting both of the fossil fuels. The purpose of both unitization and pooling is to combine the individual leases of two different properties in order to make the mineral development more beneficial. The main motive in this combined deals is to reduce the percentage of wastage and the expenses incurred in drilling the well two times for adjacent properties. Let us know in detail about the two terms.

Pooling: Pooling is the process of drilling a well by subsequent adjustments when the individual lease size is smaller than the space required for digging a well. For instance your neighbor space is small and still he gave it for lease and the lessee started drilling even though the space is not enough then there is a chance that the minerals in your land will get extracted without your notice which lands you in losses. And hence when there is small space, say 10 acres and the operator wants to drill a well which requires 40 acres he clubs three other small leases together to form a 40 acres space and then starts drilling. This is quite useful for the individual spaces too since it saves the wastage in drilling.

Unitization: Oil and gas unitizations are much more complicated than pooling since it requires large areas, several wells and needs to deal with several operators. In general, the purpose of unitization is to combine all the leases in a given reservoir or field in order to enhance the fields recovery. This is where unitization differs with pooling. Pooling requires small leases where as unitization is something related to reservoirs and is necessary when there is a flood which pushes the oil and gas around.

However, both of these processes requires the individual leases to get a fair share of the resulting production.