Mandatory Pooling Overview

Mandatory pooling is requested when an operator is unable to acquire the leases to meet the necessary acreage and/or distance requirements when applying for a drilling permit.

Mandatory pooling is created by section 1509.27 of the Ohio Revised Code and has been in effect since October 15, 1965. A mandatory pooling order can be applied for if a tract of a land is of insufficient size or shape to meet the requirements for drilling a well and the owner has been unable to form a drilling unit on a just and equitable basis. There must be no obvious alternate location and the operator must have assembled the majority (>90% is recommended) of his unit with lessors that want to have a well drilled.

Requirements for Filing a Mandatory Pooling Application

When the Division of Mineral Resources Management (DMRM) receives an application for mandatory pooling:

• A geologist reviews the application for completeness. Special attention is given to make sure the operator has verbally contacted the pooled party either by telephone or in person in an effort to obtain a lease from them.
• The application is scheduled to be presented by the operator before the Technical Advisory Council (TAC) which meets on a quarterly basis to hear mandatory pooling requests and other matters of a technical nature;
• The affected landowners are notified that an application has been filed and that they have the right to attend the TAC hearing;
• After hearing testimony from all concerned parties, the TAC makes a recommendation to the chief of DMRM, either to approve or deny the application;
• The chief issues an order either denying or approving the mandatory pooling application;
• Upon receipt of the Chief’s Order, any affected party has 30 days to appeal the order to the Oil and Gas Commission.

There has been a dramatic increase in the number of mandatory pooling applications received by DMRM that correlates with the passage of House Bills 278 and 299 in September 2004. These bills, also known as the urbanized drilling laws, gave the DMRM sole and exclusive authority for the regulation of permitting, drilling and production in Ohio. As a result, permit applications in designated urbanized areas have accounted for 25% of all drilling permits. Many of these permits are comprised of small tracts of land and mandatory pooling is requested when an operator is unable to acquire the leases to meet the necessary acreage and/or distance requirements.