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BLM>Colorado>Field Offices>Royal Gorge Field Office>Oil & Gas>Info. for O&G Operations>Communitization Agreement
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Communitization Agreement

Communitization Agreement

What is the purpose of a communitization agreement?

• Allows for pooling of federal oil and gas leases which cannot be independently developed
• Provides conformance with state spacing standards
• Prevents drilling of unnecessary wells
• Provides allocation of production and well costs on an acre-by-acre basis


What is BLM's policy on communitization agreements? 

• Contiguous acreage
• BLM requires conformance with state well spacing
• BLM reserves the right to modify on federal and Indian lands when not in public or Indian Interest
• Can form agreement before or after well drilled*
  * Advantage of forming CA prior to drilling is that reporting with Office of Natural Resources Revenue ONRR can begin 
immediately upon production.  Delay in submission of CA until after production has occurred can hinder timely reporting.

Communitization Agreement Checklist (as of 1-9-2013)
Checklist Form

Well Information System (WIS) – Electronic Reporting
http://www.blm.gov/wo/st/en/prog/energy/oil_and_gas/WIS.html

3160-5 Sundry Notices and Reports on Wells (Form)   
Submit for activities listed in regulations requiring federal approval in accordance with Onshore Orders.
http://www.blm.gov/style/medialib/blm/noc/business/eforms.Par.87753.File.dat/3160-005.pdf

BLM Manual: 3160-9 Communitization
This manual defines the Bureau of Land Management’s responsibilities concerning the review, approval, and 
supervision of communitization agreements concerning federal minerals.
http://www.blm.gov/pgdata/etc/medialib/blm/mt/blm_programs/energy/oil_and_gas/reservoir_
management/communitization.Par.10316.File.dat/3160-9Man.pdf

Key components of this manual are:

  • Execution of the Agreement :  Refer to pages 25 and 26 (Appendix 1, Page 1 and 2)
  • Unleased Federal Minerals Within Communitization Agreement Spacing Area: 
    Refer to page 11, section H. "Communitization of Unleased Tracts"
    • 43 CFR 3100-2.1:  Compensation for drainage
    • WO IM-2011-050:  Procedures to Establish Unleased Lands Accounts on Unleased Leasable Lands 
      within a Unit or a Communitization Agreement

Unleased federal lands

• BLM will approve agreement containing unleased federal lands
• Operator establishes escrow account per Section 5 of the CA
• Lands offered competitively with requirement to join agreement (stipulation)
• If lands unleasable, BLM can enter into Compensatory Royalty Agreement (CRA)

Forms or references you will need for a communitization agreement:

Code of Federal Regulations:  43 CFR Part 3100 – Oil and Gas Leasing
Refer to Subpart 3105.2  Communitization or drilling agreements
http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=bec8f06ac03faae4cedbfe41a6141207&rgn=div5&view
=text&node=43:2.1.1.3.43&idno=43

US Code, Title 30, Chapter 3A, Subchapter IV, Section 226
Refer to section:  (m) Cooperative or unit plan; authority of Secretary of the Interior to alter or modify; 
communitization or drilling agreements; term of lease, conditions; Secretary to approve operating, drilling or 
development contracts, and subsurface storage
http://www.law.cornell.edu/uscode/text/30/226

Well Completion or Recompletion Report and Log (Form)
Note:  Federal wells, defined as drilled into federal minerals requires BLM Form 3160-4; Fee wells, 
defined as private surface/private minerals within a Communitization Agreement can be submitted by using 
COGCC Form 5 (Drilling Completion Report) and Form 5A (Completed Interval Report)
http://www.blm.gov/style/medialib/blm/noc/business/eforms.Par.92687.File.dat/3160-004.pdf