Spacing and Pooling Orders

In this post, we’ll be going over two of the most important orders the Oklahoma Corporation Commission issues: Spacing Orders and Pooling Orders. Read on to learn more!

First and foremost, let’s go over the role of the Oklahoma Corporation Commission, also called the “OCC” for short. The OCC is the governing body that regulates the State of Oklahoma’s public utilities. In addition to utilities, it also regulates telephone companies as well as oil and gas drilling operations. The OCC is therefore the issuing body for all orders that govern the drilling and production of wells in Oklahoma.

One such order is called a Spacing Order. Oklahoma, among other states, uses a process called “spacing” to regulate the number and location of wells that can be drilled on a tract of land. Spacing also regulates which formations, also called common sources of supply, can be drilled below the Earth’s surface. We use this spacing process to prevent the overcrowding of drilling operations. Such overcrowding is not only dangerous, but it also ineffectively depletes oil and gas reservoirs, leaving the minerals stuck in the ground. Spacing Orders issued by the OCC create the defined tracts of land which can be drilled upon, called “drilling and spacing units.” These units may cover several common sources of supply and come in varying sizes, from 40 acres all the way to 640 acres.  

Another order issued by the OCC is called a Pooling Order. Wells can only be drilled once all mineral interest owners in the designated drilling and spacing units have agreed to produce the minerals. Sometimes, the Operator of a well can’t find all of the mineral owners or not all mineral owners are in agreement to produce the minerals. The Operator can use a process called “forced pooling,” which is the mandatory consolidation of all minerals, leased or unleased, to access their target common source of supply in a designated drilling and spacing unit. In Oklahoma, forced pooling is accomplished through a Pooling Order issued by the OCC. Operators can only force pool mineral interest owners once good-faith leasing negotiations or location attempts have failed. Force pooling allows the Operator to continue moving forward with their drilling plans, ensuring the minerals underlying the unit are not wasted.