Most leases will contain some provision giving the lessee the right to consolidate the leased premises with adjoining leased tracts. The area thus formed is called a "pool" or sometimes a "unit." The rationale for establishing such pools is to unite under one operator all the landowners having an interest in a common underground reservoir. By doing so, the lessee avoids unnecessary drilling, protects the rights of the landowners in the common reservoir and prevents waste. Sometimes pooling arrangements are necessary to meet the minimum acreage requirement for a drilling permit under state regulations.
In most states, landowners may be subjected to two types of pooling arrangements. One is voluntary; the other is compulsory or statutory. The voluntary arrangement requires the free consent of the landowner and is generally found in the context of most lease forms. The statutory arrangement, on the other hand, is mandatory whenever the specified requirements under relevant state law have been satisfied. By entering either type of pooling arrangement, the landowner may find the interpretation and application of the lease provisions materially altered.
Obviously, the landowner can do little to avoid compulsory or statutory pooling. The landowner, however, may find it advisable to exercise caution in granting the lessee the unrestricted right to pool the leased premises. The following suggestions may be helpful in this regard.