KRS 353.630: Pooling of oil and gas interests -- Conditions -- Review under KRS 353.700.

(1) Whenever any separate tract of land is so situated because of size or other condition

that it does not contain a location at which a well for oil or gas may be dril led,

deepened, or reopened by reason of the spacing provisions of KRS 353.610, the

department shall order, after notice and, for those required to be given notice,

opportunity for comment within thirty (30) days of the date shown on the postal

service proof of mailing or, where notice is provided by publication, within thirty

(30) days of the date of the publication, the pooling of all oil and gas interests in the

separate tract or in a portion thereof with all like interests in a contiguous tract or

tracts, or portions thereof, as are necessary to afford the pooled tracts one (1)

location for the drilling, deepening, or reopening of a well for the production of oil

or gas in compliance with the spacing requirements of KRS 353.500 to 353.720.

The department shall require the development and operation of all pooled acreage

as a single leasehold estate in accordance with regulations and rules promulgated

under KRS 353.500 to 353.720.

(2) Whenever an operator proposes to drill, deepen, or reopen a well at a loca tion that

would require the pooling of separate tracts or interests in order to comply with the

spacing requirements of KRS 353.610, and the operator has secured the written

consent or agreement from the owners of at least fifty -one percent (51%) of the

interests in each tract, or portions thereof, included in the proposed pooled acreage,

the department shall, where it finds that the requirements of this subsection have

been met, order, after notice, and for those required to be given notice, opportunity

for comment within thirty (30) days of the date shown on the postal service proof of

mailing or, where notice is provided by publication, within thirty (30) days of the

date of the publication, the pooling of all oil and gas interests in all tracts, or

portions thereof, that are included within the proposed pooled acreage as established

by the spacing requirements of KRS 353.610. A pooling order shall be made only

after the applicant provides notice to all persons reasonably known to own an oil or

gas interes t in any tract or portion thereof that is proposed to be pooled. For

purposes of this section, any unknown or nonlocatable owners shall be deemed to

have consented or agreed to the pooling, provided that the operator has complied

with the publication requi rements of KRS 353.640(1) with respect to the unknown

or nonlocatable owners. The department shall issue a permit to drill, deepen, or

reopen the well and require the development and operation of the pooled acreage as

a single leasehold estate in accordanc e with administrative regulations promulgated

under KRS 353.500 to 353.720.

(3) Whenever an operator proposes to drill, deepen, or reopen a well at a location that

would require the pooling of interests or tracts in order to comply with the spacing

requirements of KRS 353.610, and the operator owns or controls the right to

develop the oil and gas underlying one hundred percent (100%) of the interests in

each tract, or portions thereof, included in the proposed pooled acreage, the

department shall, where it finds that the requirements of this subsection have been

met, order, after notice and, for those required to be given notice, opportunity for

comment within thirty (30) days of the date shown on the postal service proof of

mailing or, where notice is provi ded by publication, within thirty (30) days of the

date of the publication, the pooling of all oil and gas interests in all tracts, or

portions thereof, that are included within the proposed pooled acreage established

by the spacing requirements of KRS 353 .610. A pooling order shall be made only

after the applicant provides notice to all persons reasonably known to own an oil or

gas interest in any tract or a portion thereof proposed to be pooled. For purposes of

this section, any unknown or nonlocatable ow ners shall be deemed to have

consented or agreed to the pooling, provided that the operator has complied with the

publication requirements as set forth in KRS 353.640(1) with respect to the

unknown or nonlocatable owners. The department shall issue a permi t to drill,

deepen, or reopen the well and require the development and operation of all pooled

tracts as a single leasehold estate in accordance with administrative regulations

promulgated under KRS 353.500 to 353.720.

(4) No pooling as permitted by this section shall be ordered except:

(a) When an application has been filed to drill, deepen, or reopen a well within

the distance limitations prescribed in KRS 353.610; and

(b) When a lessee or owner of an oil or gas interest in the tract shall request the

pooling.

(5) No pooling as permitted by this section shall be ordered with respect to any tract or

portion thereof upon which a well is drilled, deepened, or reopened:

(a) Unless the pooling was requested prior to the commencement of the drilling,

deepening, or reopening of the well by a lessee or owner of an oil and gas

interest in a contiguous tract pursuant to subsection (1), (2), or (3) of this

section; and

(b) Unless the request, if made by the owner of an operating interest who elects to

participate in t he risk and cost of the drilling, deepening, or reopening of the

well, is accompanied by a bond or other security satisfactory to and in an

amount set by the director for the payment of such owner's share of the cost of

drilling, deepening, or reopening the well.

(6) Production from any well which is ordered pooled pursuant to KRS 353.500 to

353.720 shall be deemed for all purposes to have been so produced from each tract

or portion thereof included in the pool in proportion to the amounts established in

the pooling order.

(7) Any order or final determination of the department under this is section shall be

subject to review in accordance with KRS 353.700 and any administrative

regulations promulgated thereunder.