The Age of Allocation: The End of Pooling As We Know it?

Examines horizontal-well environment and the inability to secure pooling authority that redirects lessees down a new path. When a compromise on pooling authority is considered impossible or too costly, operators have adopted a strategy of seeking permits to drill allocation wells. Reviews the debate centered on the narrow legal standard of whether a lessee has a good-faith claim to the right to drill an allocation well. But wide differences of opinion belie this narrow standard, and due to the novelty of the issue, direct guidance from the courts and the legislature is thin.