Forced Pooling Application

Saskatchewan's forced pooling process offers a regulatory avenue to resolve oil and gas pooling issues between parties.

As outlined in Subsection 14 (3)(b) of The Oil and Gas Conservation Regulations, 2012, the Minister of Energy and Resources may refuse to issue a well if there is no agreement for the pooling of interests for the development and operation of the drainage unit, or if there is not an order for the pooling of the interests in accordance with Subsection 30 (5) of The Oil and Gas Conservation Act.

In most cases, owners negotiate voluntary pooling arrangements. If parties attempt but fail to negotiate a satisfactory pooling arrangement in a reasonable period of time, the owner wishing to drill a well may apply to the ministry for a forced pooling order. This order serves the same purpose as a voluntary pooling arrangement by ensuring each owner in the drainage unit shares the costs and revenues associated with a well in the drainage unit or drainage area. The forced pooling order may be amended or cancelled in accordance with section 33.1 of The Oil and Gas Conservation Act.

Application for a forced pool order can be made when:

• There is a known non-participating party in the drainage unit or drainage area. The pooling provision does not apply to situations where there is a missing party, unknown party or unsettled estate.
• The applicant has made substantial efforts to negotiate a voluntary pooling arrangement before applying for forced pooling; the application should be a last resort.
• Consultation is conducted with participating parties in the drainage unit.
• There is geological potential for the lands the operator proposes to drill into.
• There is no alternate location to drill.
• Copies of the application are sent to all parties potentially affected by the forced pooling order at the time the submission is made.

The pooling order may be amended upon application. For example, if:

• extending the expire date specified in the order;
• changing the well operatorship; and/or
• adding wells in the same drainage unit or drainage area.

The pooling order may be cancelled upon application. For example, if:

• the pooling order is no longer required;
• modifying the well drainage unit or drainage area;
• modifying the production allocation factor; and/or
• modifying the drilling and operation and the payment of the costs, which is specified in the pooling order.

A separate application must be made for each drainage unit, but where there is common, undivided interest within a section or portion of land, a single application for several drainage units is acceptable.

1. Refer to Saskatchewan's Mining and Petroleum GeoAtlas to determine the size of the drainage unit involved. The drainage unit should be consistent with the substance to be pooled (oil or gas).
2. Refer to Directive PNG006: Horizontal Well Requirements and Guideline PNG021: Determining Drainage Units and Target Areas to determine the drainage area and target area for horizontal wells.
3. Complete a Forced Pooling Application Form.
4. Gather all required documents listed in the application form.
5. Log in to IRIS and complete the appropriate application process for authorization and attach the required documents.

IRIS Login

The ministry reviews the application for completeness and determines whether the operator reasonably attempted to negotiate a voluntary pooling agreement with the impacted parties. If, in the opinion of the ministry, adequate attempts have not been made, the application is deferred or denied pending such voluntary negotiations.

Efforts to resolve the matter on a voluntary basis (including use of a third-party mediator) after filing the application with the ministry should continue to be made.

If the ministry proceeds, the non-participating party has three weeks from the date of the notification to respond to the forced pooling application:

• If there is no response from the non-participating party, the ministry may initiate the process for force pooling the drainage unit or drainage area.
• If the response from the non-participating party is valid, the ministry determines whether or not to force pool the drainage unit or drainage area based on the operator's application and the statement letter filed by the non-participating party.
• The ministry may insist both parties continue to work on resolving their differences and voluntarily pool the drainage unit or drainage area.

If the forced pooling application is rejected, a copy of the rejection letter is sent to the applicant and non-participating party. If a decision is made to force pool the drainage unit, the ministry issues a Minister's Order (MRO) with the pooling agreement.

A forced pooling application is confidential, even after an approval is issued, due to the sensitive nature of the information related to this application type.