Definition - What does Residue Pooling mean?
Residue Pooling is the combination and consolidation of a leased land with adjoining leased tracts. It is a contractual agreement which states that the gas generated from the seller’s covered properties, i.e., various oil and gas leases will be treated as gas generated from a single property. Based on the pooling it is determined whether the producer has utilized more natural gas than the one he or she is entitled for.
Petropedia explains Residue Pooling
A pooling is a concept in oil and gas lease properties that corresponds to the merging of various small or big properties together and calling them as a single unit in which the hydrocarbons either oil or gas are obtained from various oil and gas leases. When all these big and small tracts of land which are a source of hydrocarbon production are brought as a single unit, they are referred to as pooling.
The raw natural gas generated from all the pooled leases is processed in the natural gas processing terminals and the pipeline quality dry natural gas or the residue gas is sold to the end user market and used for the gas producers own utilization purpose. Thus the operator who is operating in a certain tract of lease is awarded the pooled residue gas for use based on the proportion of working interest and ownership.