Unitization: Great Explanation -- Bakken, North Dakota, USA

For a great description of "unitization," click here and go to "second comment," posted June 30, 2011. [This link is now broken.]

I've also linked it at my "frequently asked questions" page: this appears to be best the answer from most reliable source (this site is down) posted July 1, 2011:

"Basically, under untization, the spacing units disappear and the entire  field boundary lines become a big spacing unit, where all the owners within the field share in production from the entire field, which is allocated to  the owners by an agreed upon formula. The field becomes one big "spacing  unit," because the oil is being artificially forced across would have been the old spacing unit boundaries by the secondary recovery methods  (i.e., waterflood, CO2 etc.).  There will be a hearing or a number of  hearings with the DMR.

The state law requires that 60% of the mineral ownership approve of the  unit, and I believe votes are weighted by amount of acreage owned in the  unit. Most of the larger, older, conventional (i.e., non-Bakken) fields have  been unitized in ND -- Beaver Lodge, Blue Buttes, Fryburg, Big Stick.  The only one I'm aware that was defeated by the mineral owners was in Little  Knife field (Madison pool), and I think most would agree that such action  left a lot of recoverable oil in the ground.

Don't hold me to this, but if you are leased -- and your leases are not currently held by production -- if your leases are included in the unit (and  assuming the unitization plan is approved), they will be considered to be under production, as you will receive royalties pursuant to the formula."

An earlier source said this, which I posted August 2, 2010: Whatever unitization is, it remains a "non-issue" in North Dakota as of 2010. Seriously, here the discussion begins  (this site is down). Unitization is similar to pooling, but it occurs when producer(s) are ready to use enhanced oil recovery to maximize production from a common reservoir. With the Bakken being one huge continuous "reservoir" it's  hard to see how unitization could work, unless they do it by field, an arbitrary designation, in my mind, when it comes to the Bakken. Sixty percent of royalty owners (weighted) must agree to unitization before the NDIC will authorize it. To date, unitization has not occurred in North Dakota (August 2, 2010).

The NDIC hearing docket for August, 2011, will consider unitization of Lost Bridge-Bakken. The state is considering unitizing the Little Missouri State Park, October, 26, 2011.

An effort to unitize the Grail oil field failed. The operator took the case off the NDIC hearing dockets when faced with a fair amount of opposition to unitization.