The terms “pooling” and “unitization” are often used interchangeably. To confuse the matter further, in Ohio, there are statutory definitions for a “pool” and a “drilling unit” and neither is related to a “unit.” Hopefully, this will provide some clarification.
Pooling and Unitization, Generally
To “pool” [the verb] is to combine multiples into a common entity or fund. In an unfortunate and confusing coincidence, a “pool” [the noun] is an accumulation of a liquid, including oil. As in other specialized areas of law, common terms can have special meanings – so-called “terms of art.”
In the world of oil and gas, the common understanding of pooling, a pool or a pooled unit is the joining together or a combination of small tracts or portions of tracts for the purpose of having sufficient acreage to receive a well drilling permit under the relevant state spacing laws and regulations, and for the purpose of sharing production by interest owners in such a pooled unit. Bruce M. Kramer & Patrick H. Martin, The Law of Pooling and Unitization 1-3 (3d ed. 2006).
In contrast, “unitization” or unit operations refers to the consolidation (don’t use the word “pooling”) of mineral or leasehold interests covering all or part of a common source of supply. Id. at 1-4. That is, “unitization” refers to field or reservoir-wide development, which entails much more to accomplish than a pooled unit around a single well.
The objective of unitization is to provide for the unified development and operation of an …
Part of the mission of the Energy Resources Program of the United States Geological Survey (“USGS”) is to determine the location, quantity, and quality of U.S. mineral and energy resources. In pursuit of that mission, the USGS recently conducted a survey of the potential of the Utica shale across the Appalachian Basin.
The results of the USGS survey are summarized in its report, Assessment of Undiscovered Oil and Gas Resources of the Ordovician Utica Shale of the Appalachian Basin Province, 2012, recently published on the USGS website.
The USGS concluded that Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia are all in the Utica shale play. The survey also makes some rather eye-popping findings about the potential of the Utica shale in Ohio. The survey found that based on certain observed characteristics of the Utica shale and assumptions grounded in observations in other shale plays, Ohio is in an oil “sweet spot.” The USGS actually defined both an oil sweet spot and a gas sweet spot in the Utica shale play as shown on the following map*:
*Kirschbaum, M.A., Schenk, C.J., Cook, T.A., Ryder, R.T., Charpentier, R.R., Klett, T.R., Gaswirth, S.B., Tennyson, M.E., and Whidden, K.J., 2012, Assessment of undiscovered oil and gas resources of the Ordovician Utica Shale of the Appalachian Basin Province, 2012: U.S. Geological Survey Fact Sheet 2012–3116, 6 p., Figure 4.
The USGS survey projected the mean “technically recoverable continuous (unconventional) oil and gas resources” from the Utica and Point Pleasant shale …
As public concern about hydraulic fracturing (“fracking” or “fracing”) grows and historic drought conditions parch most of the country, the limelight is focused on technologies that offer alternatives to traditional hydraulic fracturing, which uses large volumes of water.
One of the more established technologies in this emerging market is a process that uses liquid petroleum gas (or “LPG”) gel to replace water in traditional fracking operations. The LPG gel is composed primarily of propane or butane gas. GasFrac Energy Services, Inc. has used its proprietary LPG gel fracking process on more than 1,000 wells in Canada and the United States. GasFrac is expected to dramatically expand its operations in the Utica and Marcellus shale plays in the coming months and years.
Another alternative to traditional hydraulic fracturing that operators have been testing uses carbon dioxide or nitrogen foam instead of water. This technology, being marketed by Baker Hughes under the trade name “VaporFrac,” uses merely 10% of the water needed for traditional fracking. Earlier this year Chesapeake reported that it fracked a well in Portage County, Ohio using carbon dioxide foam.
Finally, Chimera Energy Corporation is pioneering a new process it describes as a “revolutionary exothermic non-hydraulic extraction process.” Although Chimera has not disclosed the details of the process, its website explains that the process relies on a chemical reaction among various metal oxides to create extreme heat and pressure to force open shale fractures and release trapped oil and gas. The process is apparently completely waterless but …