Directive 065 - Energy Resources Conservation Board

1.5 Application for a Compulsory Pooling Order
1.5.1 Background
Section 4.021(2) of the Oil and Gas Conservation Regulations specifies that no well shall be
produced unless there is common ownership throughout the drilling spacing unit (DSU). This
means that if there are separate tracts within a DSU with different ownership, all owners
within the DSU must have an arrangement to share in the costs and revenues associated with
drilling and producing a well from that spacing unit. This type of arrangement is generally
referred to as a pooling agreement. In most cases, mineral holders negotiate voluntary pooling
arrangements. However, if an owner attempts but fails to negotiate a satisfactory pooling
arrangement in a reasonable period of time, or a tract owner is missing and untraceable, or
there is a dispute as to the ownership of a tract, the owner wishing to drill a well may apply to
the ERCB for a compulsory pooling order. This order serves the same purpose as a voluntary
pooling arrangement by ensuring that each owner in the DSU shares appropriately in the
costs and revenues associated with a well in the DSU.
The ERCB’s role in pooling matters, therefore, is to offer a regulatory avenue to resolve
problems relating to pooling issues, thereby allowing each owner the opportunity to obtain its
share of oil and gas from any pool.
Applications for compulsory pooling are made
• under Section 80 of the Oil and Gas Conservation Act (OGCA);
• if there is a missing and untraceable owner in the spacing unit, under both Sections 80
and 85 of the OGCA (Section 85 provides that the revenues associated with the missing
and untraceable owner be paid to the Public Trustee); and
• if there is a dispute as to the ownership of a tract or ownership is unknown, under both
Sections 80 and 86 of the OGCA (Section 86 provides that revenues associated with the
disputed tract be paid to the Provincial Treasurer to be held in trust pending an order of
the Court of Queen’s Bench or until a settlement has been reached by the parties).
The ERCB’s current policies and practices respecting pooling arise from a combination of
specific provisions of the OGCA, historical decisions made by the ERCB, consultations with
industry, and ERCB decisions resulting from pooling applications considered at public
hearings. These avenues have resulted in an ERCB pooling order with standard terms.
Nonstandard terms are included in an order only if there is substantial justification to do so.
General information on major ERCB policies and practices respecting pooling and the
standard terms of a pooling order are noted below in the Requirements sections. More
detailed information can be obtained from ERCB staff.
1.5.2 How the ERCB Processes the Application
ERCB staff initially review a pooling application for completeness. If additional information
is required, a letter is issued itemizing the information required. Processing of the application
is deferred pending receipt of the requested information.
ERCB Directive 065: Resources Applications / Compulsory Pooling (March 2012) • 1-29