Legal Definitions - communitization

Definition: Communitization refers to the process of aggregating small tracts of land to meet the requirements for obtaining a permit to drill a well in the oil and gas industry. This process is also known as pooling.

Example: In the oil and gas industry, communitization is used to combine small tracts of land owned by different individuals or companies to form a larger unit that meets the minimum requirements for drilling a well. This allows for more efficient and cost-effective extraction of oil and gas resources.

Explanation: Communitization is necessary in the oil and gas industry because drilling a well requires a certain amount of land to be available for the drilling process. By combining small tracts of land, companies can meet the minimum requirements for drilling a well without having to negotiate with each individual landowner. This process helps to streamline the drilling process and make it more efficient.