The Railroad Commission of Texas (RRC) is the state agency primarily responsible for regulating the oil and gas industry, pipelines, natural gas and hazardous liquid pipeline safety, the liquefied petroleum gas industry, and coal and uranium surface mining operations. Although its name might suggest otherwise, the RRC no longer oversees railroads. Its mission is to ensure the safe and efficient production and transportation of energy resources while protecting the environment and public health. Today, we are going to take a look at the pooling and acreage designation process.
Oversight and Regulation
The RRC’s oversight includes:
- Issuing drilling permits and monitoring well drilling activities.
- Ensuring compliance with state and federal environmental regulations.
- Overseeing the safe transportation of oil and gas via pipelines.
- Monitoring and regulating the production levels and practices of oil and gas operations to prevent waste and protect the rights of mineral owners.
Forms Used by Operators
Texas operators must file various forms with the RRC to ensure compliance and proper documentation throughout the drilling and completion processes. These forms cover a range of activities, from drilling permits to production reports. The P-12 and P-16 forms are two critical forms in creating producing units.
Form P-12: Certificate of Pooling Authority
The Form P-12 is used by operators to certify that they have the authority to pool different tracts of land into a single production unit. Pooling is a method that allows multiple landowners to combine their small tracts to form a unit large enough to meet state regulations for drilling a well. This form is essential for operators to show that they have legal permission to consolidate these tracts and develop the mineral resources collectively. The P-12 includes:
- The names of the pooled tracts and their owners.
- The percentage of interest each owner has in the pooled unit.
- The total acreage of the pooled unit.
Form P-16: Acreage Designation
The Form P-16 is used to designate the specific acreage assigned to a drilling unit, which is crucial for both regulatory compliance and operational planning. This form ensures that the drilling and production activities are accurately recorded and reported, helping the RRC to monitor production and enforce spacing rules. The P-16 includes:
- Detailed maps showing the boundaries of the drilling unit.
- Legal descriptions of the acreage.
- Information on existing wells and their locations within the unit.
- Designation of the operator responsible for the unit.
Creating Producing Units
The process of creating producing units involves strategically combining land tracts and ensuring all necessary legal and regulatory filings are complete. The P-12 form certifies that pooling authority has been obtained, while the P-16 form provides the detailed designation of the drilling unit’s acreage. Together, these forms ensure that the operator can legally and efficiently develop the oil and gas resources, comply with state regulations, and protect the rights and interests of all stakeholders involved.
By meticulously managing these filings, operators can optimize their production processes, adhere to environmental and safety standards, and contribute to the efficient extraction of Texas’ abundant oil and gas resources.
Visit the Texas Railroad Commission website – HERE
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