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Communitization Agreements in the 21St Century

Angela L. Franklin, Federal Onshore Oil and Gas Pooling and Unitization (2006)

This paper is limited to communitization agreements, which is one of the six types of agreements recognized by the regulations concerning Cooperative Conservation Provisions.2 This paper briefly reviews the statutory history authorizing communitization of federal oil and gas leases; the purposes for a communitization agreement; the form of communitization agreement appearing in the Bureau of Land Management (BLM) Manual; the procedures leading up to final approval of a communitization agreement; communitization on Indian lands; and peculiar problems that may be encountered with respect to communitization agreements.

For purposes of this paper, the following definitions will be utilized:

Pooling: The voluntary or compulsory joining of leases for common development within state established drilling or spacing units.

Communitization: The agreement to combine small tracts which include at least one or more federal and/or Indian leases, for the purpose of committing enough acreage to form the spacing and proration unit necessary to comply with the applicable state conservation requirement and to provide for the development of separate tracts which could not be independently developed or operated in conformity with the well spacing pattern established in the area or by order of the state regulatory agency.3