>Thanks for the link Lanman, it sure does help to understand the unitization laws.
The nice part is that the laws are simple and pretty much universal. When a 'trigger' is met, the parties are given a chance to come to an agreement amongst themselves. If they can't, then the government will decide on the terms.
Alaska is an interesting place to look for examples. Currently there are about 48 'unitized' fields there.
When a field in Alaska lies beneath two or more leases, those leases are almost always “unitized” — that is, the lessees and the State as lessor enter into an agreement to treat the field as if all the leases that it lies under were one big lease or “unit.” This unit agreement establishes how much of the field’s oil and gas production is deemed to originate from each of the leases, in proportion to the relative quantity of recoverable oil and gas estimated to be under each one. This ensures that the lessees in each lease receive their rightful shares of the production regardless which lease it might actually be originating from at any given time, and it further allows the reservoir to be developed and operated as a whole. It also ensures that the State receives the proper share of production as its royalty, since not all leases have the same percentage for state royalty. Without unitization, the “law of capture” (i.e., you own what you produce) could apply in which field development is a free-for-all with each lease or tract being developed and drilled as quickly as possible in order to drain as much oil and gas from its neighbors as it can, without regard to maximizing total recovery from the field. The clichéd movie footage showing drilling rigs standing toe to toe and oil wells pumping away just a few feet apart illustrates the inefficient and ultimately ruinous way fields can be developed under the “law of capture” without unitization. In fact, the very concept of unitization originated in reaction to the gross physical waste of the resource that repeatedly occurred under an unchecked “law of capture” approach.
Here's an example of 'forced' unitization. It's rather old news though (last week) :)
http://www.peninsulaclarion.com/stor...
