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353.630 Pooling of oil and gas interests -- Conditions.
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Whenever any separate tract of land is so situated because of size or other condition
that it does not contain a location at which a well for oil or gas may be drilled,
deepened, or reopened by reason of the spacing provisions of KRS 353.610, the
department shall order, after notice and a hearing, the pooling of all oil and gas
interests in the separate tract or in a portion thereof with all like interests in a
contiguous tract or tracts, or portions thereof, as are necessary to afford the pooled
tracts one (1) location for the drilling, deepening, or reopening of a well for the
production of oil or gas in compliance with the spacing requirements of KRS
353.500 to 353.720. The department shall require the development and operation of
all pooled acreage as a single leasehold estate in accordance with regulations and
rules promulgated under KRS 353.500 to 353.720.
Whenever an operator proposes to drill, deepen, or reopen a well at a location that
would require the pooling of separate tracts or interests in order to comply with the
spacing requirements of KRS 353.610, and the operator has secured the written
consent or agreement from the owners of at least fifty-one percent (51%) of the
interests in each tract, or portions thereof, included in the proposed pooled acreage,
the department shall, where it finds that the requirements of this subsection have
been met, order, after notice and a hearing, the pooling of all oil and gas interests in
all tracts, or portions thereof, that are included within the proposed pooled acreage
as established by the spacing requirements of KRS 353.610. For purposes of this
section, any unknown or nonlocatable owners shall be deemed to have consented or
agreed to the pooling, provided that the operator has complied with the publication
requirements of KRS 353.640(1) with respect to the unknown or nonlocatable
owners. The department shall issue a permit to drill, deepen, or reopen the well and
require the development and operation of the pooled acreage as a single leasehold
estate in accordance with administrative regulations promulgated under KRS
353.500 to 353.720.
Whenever an operator proposes to drill, deepen, or reopen a well at a location that
would require the pooling of interests or tracts in order to comply with the spacing
requirements of KRS 353.610, and the operator owns or controls the right to
develop the oil and gas underlying one hundred percent (100%) of the interests in
each tract, or portions thereof, included in the proposed pooled acreage, the
department shall, where it finds that the requirements of this subsection have been
met, order, after notice and a hearing, the pooling of all oil and gas interests in all
tracts, or portions thereof, that are included within the proposed pooled acreage
established by the spacing requirements of KRS 353.610. The department shall
issue a permit to drill, deepen, or reopen the well and require the development and
operation of all pooled tracts as a single leasehold estate in accordance with
administrative regulations promulgated under KRS 353.500 to 353.720.
No pooling as permitted by this section shall be ordered except:
(a) When an application has been filed to drill, deepen, or reopen a well within
the distance limitations prescribed in KRS 353.610; and
(b) When a lessee or owner of an oil or gas interest in the tract shall request the
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pooling.
No pooling as permitted by this section shall be ordered with respect to any tract or
portion thereof upon which a well is drilled, deepened, or reopened:
(a) Unless the pooling was requested prior to the commencement of the drilling,
deepening, or reopening of the well by a lessee or owner of an oil and gas
interest in a contiguous tract pursuant to subsection (1), (2), or (3) of this
section; and
(b) Unless the request, if made by the owner of an operating interest who elects to
participate in the risk and cost of the drilling, deepening, or reopening of the
well, is accompanied by a bond or other security satisfactory to and in an
amount set by the director for the payment of such owner's share of the cost of
drilling, deepening, or reopening the well.
Production from any well which is ordered pooled pursuant to KRS 353.500 to
353.720 shall be deemed for all purposes to have been so produced from each tract
or portion thereof included in the pool in proportion to the amounts established in
the pooling order.
Effective: June 24, 2003
History: Amended 2003 Ky. Acts ch. 150, sec. 14, effective June 24, 2003. -- Amended
2000 Ky. Acts ch. 268, sec. 2, effective July 14, 2000. -- Amended 1986 Ky. Acts ch.
233, sec. 1, effective July 15, 1986. -- Created 1960 Ky. Acts ch. 103, sec. 15,
effective June 16, 1960.
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