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2010 Oklahoma Code
Title 52. Oil and Gas
Share | §521. Corporation Commission or Commission defined.

As used in Title 52, the term "Corporation Commission" or "Commission" shall mean the Corporation Commission of Oklahoma, or any employee, agent, deputy or representative of the Commission as shall be authorized by law or the Commission to perform any duty, responsibility or function, or exercise any power, unless the intent of the statute clearly prohibits such an authorization.

Added by Laws 1980, c. 86, § 5, eff. July 1, 1980.



§521.1. Corporations for producing, transmitting or transporting natural gas.

Any firm, co-partnership, association, or combination of individuals may become a body corporate under the laws of this state for the purpose of producing, transmitting, or transporting natural gas to points within or without this state by complying with the general corporation laws of the State of Oklahoma.

R.L.1910, § 4290. Amended by Laws 1929, c. 44, p. 56, § 1; Laws 190708, p. 586; C.S. 1921, § 7889; St. 1931, § 11507. Renumbered from § 1 by Laws 1980, c. 86, § 6.



§522. Foreign gas pipeline corporations License.

Foreign corporations formed for the purpose of, or engaged in the business of transporting or transmitting natural gas by means of pipe lines, shall be licensed and permitted to conduct such business within this state by complying with the general corporation laws of the State of Oklahoma, and with the provisions of this article.

R.L.1910, § 4292. Amended by Laws 1929, c. 44, p. 56, § 2.



§523. Eminent domain.

No association, combination, co-partnership or corporation shall have or exercise the right of eminent domain within this state for the purpose of constructing or maintaining a gas pipeline within this state, or shall be permitted to take private or public property for their use within this state, unless expressly granted such power in accordance with this article.

R.L.1910, § 4293.



§52-5. Construction and operation of pipelines - Safety regulations - Markers - Personnel - Expenses.

The Corporation Commission is hereby authorized, directed and empowered to promulgate, adopt and enforce reasonable rules and regulations establishing minimum state safety standards for the design, construction, maintenance and operation of all pipelines used for the transmission and distribution of natural gas in this state; provided, however, the Commission shall not promulgate, enforce or interpret any rule or regulation unless such rule, regulation or interpretation shall be consistent with and no more restrictive than the rules, regulations and interpretations of the United States Secretary of Transportation for pipeline transportation and pipeline facilities. When any such transmission pipeline shall be constructed, operated or maintained under, through and across a highway, sectionline road or improved public road or street, there shall be erected directly above where such pipeline enters or leaves said highway, sectionline road or improved public road or street, a suitable sign or marker stating thereon the name of the owner of such pipeline and such other information as the Corporation Commission may by rule or regulation direct.

The Corporation Commission may appoint a registered professional engineer with actual experience in the design, construction, maintenance or operation of natural gas pipelines, and such other personnel as may be provided by law, to carry out the provisions of this act. Such engineer shall be furnished with personnel, supplies and equipment as may be necessary to carry out the provisions of this act. The expenses of any inspection shall be borne and paid for by the parties laying and constructing or operating such pipelines for the transportation or transmission of natural gas.

Unless a different meaning is required by the express term of an applicable federal statute, rule or regulation, the term “liaisonâ€

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§5241. Gas from interstate pipelines License from Corporation Commission.

All domestic gas pipeline corporations in this state, which are now, or shall hereafter fully comply with the laws of this state, and all municipal corporations, owning or operating a gas plant, or which may hereafter own or operate a gas plant, may contract with and secure from foreign corporations, operating interstate gas pipelines, the supply of gas for said domestic gas companies. And said interstate gas pipeline companies or foreign corporations may enter into said contract and deliver said gas, upon obtaining a license from the Corporation Commission, which is hereby authorized to grant a license to do and transact that particular business of supplying domestic corporations with natural gas, and the taking out of said license and the conduct of said business with domestic pipeline companies, shall not prejudice the said interstate pipeline companies, or foreign corporations in the transaction and conducting of their interstate business; provided, the Corporation Commission may revoke said license when, in its discretion, the public interest may be best subserved thereby.

Added by Laws 1913, c. 98, p. 165, § 1, emerg. eff. March 26, 1913.



§52-42. Repealed by Laws 1993, c. 340, § 3, emerg. eff. June 9, 1993.

§52-43. Repealed by Laws 1993, c. 340, § 3, emerg. eff. June 9, 1993.

§5244. Gas to be furnished through meters at meter rates Exceptions.

All persons, firms, corporations or other business organizations engaged in the business of furnishing natural gas in municipalities in this state, to the inhabitants thereof, shall do so through standard meters at meter rates; provided, that this act shall only apply to towns where the population exceeds five hundred (500), and shall not prohibit the sale of gas at a flat rate to federal, state or municipallyowned buildings, institutions or plants; Provided further, that this act shall not abrogate any existing contract, or effect or change the terms or conditions of any franchise granted by any municipal corporation prior to, and in effect April 28th, 1913.

Added by Laws 1913, c. 152, p. 309, § 1, emerg. eff. April 28, 1913. Amended by Laws 1915, c. 200, p. 407, § 1.



§5245. Violations of act misdemeanor Punishment.

Any person, firm, corporation or other business organization who shall violate any of the provisions of this act shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than Five Dollars ($5.00) nor more than Twentyfive Dollars ($25.00), and each day of such violation shall be deemed a separate offense.

Added by Laws 1913, c. 152, p. 309, § 2, emerg. eff. April 28, 1913.



§5246.1. Ammonia Commercial fertilizers Transportation by pipeline.

Pipeline companies operating in this state as common carriers and companies operating pipelines in this state for conveying natural or artificial gas for public utility service may transport by pipeline ammonia and other substances and materials comprising commercial fertilizer or used in manufacturing commercial fertilizer when specifically authorized to so do by the Oklahoma Corporation Commission.

Added by Laws 1967, c. 48, § 1, emerg. eff. April 10, 1967.



§5246.2. Hearing and determination of applications Appeals.

Applications for authority to operate under Section 1 of this act shall be heard and determined by the Oklahoma Corporation Commission and appeals from the Oklahoma Corporation Commission's orders in such matters shall be granted pursuant to the Oklahoma Constitution, Article 9, Sections 20, 21 and 22.

Added by Laws 1967, c. 48, § 2, emerg. eff. April 10, 1967.



§5246.3. Eminent domain.

All companies authorized by the Oklahoma Corporation Commission to operate under Section 1 of this act shall have and exercise the right of eminent domain in the same manner and by like proceedings as provided for railroad corporations by the laws of this state.

Added by Laws 1967, c. 48, § 3, emerg. eff. April 10, 1967.



§5246.4. Rules and regulations.

The Oklahoma Corporation Commission shall make such reasonable rules and regulations as may be necessary to administer this act.

Added by Laws 1967, c. 48, § 4, emerg. eff. April 10, 1967.



§5247.1. Short title.

Sections 1 through 8 of this act shall be known and may be cited as the "Hazardous Liquid Transportation System Safety Act".

Added by Laws 1984, c. 80, § 1, eff. Nov. 1, 1984.



§52-47.2. Definitions.

As used in the Hazardous Liquid Transportation System Safety Act:

1. “Commissionâ€

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§5247.7. Action to redress or restrain violation.

The Commission may request the Attorney General to bring an action in a court of competent jurisdiction for equitable relief to redress or restrain a violation by any person of a provision of the Hazardous Liquid Transportation System Safety Act or a rule, regulation, or order issued pursuant to the provisions of the Hazardous Liquid Transportation System Safety Act. Said court has jurisdiction to determine said action, and to grant the necessary or appropriate relief, including but not limited to mandatory or prohibitive injunctive relief, interim equitable relief, and punitive damages.

Added by Laws 1984, c. 80, § 7, eff. Nov. 1, 1984.



§5247.8. Appeals.

Any person aggrieved by any order of the Commission issued pursuant to the provisions of the Hazardous Liquid Transportation System Safety Act or rules and regulations promulgated pursuant to the provisions of the Hazardous Liquid Transportation System Safety Act may appeal said order as provided for by Section 318 of Title 75 of the Oklahoma Statutes.

Added by Laws 1984, c. 80, § 8, eff. Nov. 1, 1984.



§5251. Oil companies must comply with statute "Petroleum" defined.

Every corporation, joint stock company, partnership or other person, exercising or claiming the right to carry or transport crude oil or petroleum, or any of the products thereof, by or through pipelines, for hire or otherwise, or exercising or claiming the right to engage in the business of producing crude oil or petroleum, or of refining it, or manufacturing any of the products thereof, or of storing crude oil or petroleum produced by it, or any other person, or engaging in the business of buying, selling or dealing in crude oil or petroleum, within the limits of this state, shall not have or possess the right to conduct or engage in said business or operation, in whole or in part, as above described, or have or possess the right to locate, maintain, or operate the necessary pipelines, fixtures and equipment thereunto belonging, or used in connection therewith, concerning the said business of carrying or transporting crude oil or petroleum as aforesaid, on, over, along, across, through, in or under any present or future highway, or part thereof, within this state, or have or possess the right of eminent domain, or any other rights, concerning said business or operations, in whole or in part, except as authorized by and subject to the provisions of this article, and except such rights as may already exist which are valid, vested, and incapable of revocation by any law of this state or of the United States. The word "petroleum" as used herein means all crude oil and its manufactured products, not including natural gas.

R.L. 1910, § 4304.



§5252. Rightofway.

For the purpose of acquiring necessary rightofway, every such person as defined in this act is hereby granted the right of condemnation by eminent domain, and the use of the highways in this dtate, for the purpose of transporting petroleum, liquid or liquifiable hydrocarbons and chemicals, except coal, which are transportable by pipeline, and for the location, laying, construction, maintaining and operation thereof.

R.L. 1910, § 4305. Amended by Laws 1967, c. 176, § 1, emerg. eff. May 1, 1967.



§5253. Foreign corporations.

Corporations of other states or territories, or of the United States, otherwise admissible to do business in this state, may get the benefit of this article upon compliance with the laws and Constitution of this state, including the provisions of Section 31, of Article IX, of the Constitution, but until such compliance they shall have no right in, on or under the highways.

R.L. 1910, § 4306.



§5254. Common purchasers of oil Required to purchase Discrimination prohibited.

Every corporation, joint stock company, partnership or other person, claiming or exercising the right to carry or transport crude oil or petroleum or any of the products thereof, by pipeline for hire or otherwise, within the limits of this state, as allowed by, and upon compliance with the requirements of this article, as owner, lessee, licensee, or by virtue of any other right or claim, which is engaged in the business of purchasing crude oil or petroleum therein, shall be deemed a common purchaser thereof, and shall purchase all of the petroleum in the vicinity of, or which may be reasonably reached by its pipelines, or gathering branches, without discrimination in favor of one producer or one person as against another, and shall fully perform all the duties of a common purchaser; but if it shall be unable to perform the same, or shall be legally excusable from purchasing and transporting all of the petroleum produced, then it shall purchase and transport petroleum from each person and producer ratably, in proportion to the average daily production; and such common purchasers are hereby expressly prohibited from discriminating in price or amount for like grades of oil, or facilities as between producers or persons; and in the event such purchaser is likewise a producer, it is hereby prohibited from discriminating in favor of its own production, or storage, or production or storage in which it may be interested, directly or indirectly in whole or in part, and its own production and storage shall be treated as that of any other person or producer.

R.L. 1910, § 4307.



§5255. Chapter inapplicable to businesses not of public consequence.

All persons, firms, associations, and corporations are exempt from the provisions of this article where the nature and extent of their business are such that the public needs no use in the same and the conduct of the same is not a matter of public consequence; and for this purpose the district courts of the state and the Corporation Commission are vested with jurisdiction to determine such exemptions in any action or proceeding properly before them, as provided in this article.

R.L. 1910, § 4308.



§5256. Oil carriers are common carriers Discrimination prohibited.

Every corporation, joint-stock company, partnership or person, engaged in the business of carrying or transporting crude oil or petroleum or any of the products thereof for hire or otherwise, by pipeline, within this state, and by virtue of and in conformity to, any valid law incapable of revocation by any laws of this state or of the United States, or by virtue of and in conformity to the provisions of this article, shall be deemed a common carrier thereof as at common law and no such common carrier shall allow or be guilty of any unjust or unlawful discrimination, directly or indirectly, in favor of the carriage, transportation, storage or delivery of any crude, stock or storage oil, or any products thereof, in its possession or control, or in which it may be interested, directly or indirectly.

R.L. 1910, § 4309.



§5257. Oil carriers not to be interested in producing.

It shall be unlawful for any corporation, joint-stock company, partnership or person, engaged in the business of carrying or transporting crude oil or petroleum, or any of the products thereof, for hire or otherwise, within the limits of this article, and not becoming a common purchaser as defined by, and accepting the provisions of this article, to own or operate, directly or indirectly, any oil well, oil leases or oil holdings or interests in this state, and each of said corporations, joint stock companies, partnerships or persons, shall divest themselves of all legal or equitable ownership, interest or control, directly or indirectly, in oil wells, oil leases or oil holdings or interests in this state.

R.L. 1910, § 4310.



§5258. Acceptance of laws and plats to be filed.

Before any corporation, joint stock company, partnership or person, shall have, possess, enjoy or exercise the right of eminent domain, rightofway, right to locate, maintain or operate pipelines, fixtures or equipment thereunto belonging, or used in connection therewith, as authorized by the provisions of this article, or shall have, possess, enjoy or exercise any right (the word "right" in this connection being used in its most comprehensive legal sense) conferred by this article, every such corporation, joint stock company, partnership or other person shall file in the office of the Corporation Commission a proper and explicit authorized acceptance of the provisions of this article, and the Constitution of this state, and, in cases of pipe lines, a plat showing in detail the points within this state between which, and the route along which, the trunk lines are proposed to be constructed, the intended size and capacity thereof, and the location and capacity of all pumping stations, gate valves, check valves and connections and appliances of all kinds used, or to be used, on said trunk lines; and upon demand of the Corporation Commission, the proper parties, as required by said Commission, shall promptly file a plat showing in detail all the lines owned and operated by them respectively, with full and explicit information as to their capacity, size and location, and the capacity of their pumping stations, gate valves, check valves and connections, of all kinds, required or used in the operation thereof.

R.L. 1910, § 4311.



§5259. Domestic pipeline companies have rightofway.

Every domestic pipeline company in this state is hereby given authority to build, construct, lay and maintain oil pipelines over, under, across, or through all highways, bridges, streets or alleys in this state, or any public place therein, under the supervision of the inspector of oil and gas wells and pipelines as to where and how in said highways, bridges, streets, alleys and public places said pipelines shall be laid, and subject to the control of the local municipalities, as to how the business of distribution in that municipality shall be conducted, and subject to responsibility as provided by law for any negligent injury thereby caused.

R.L. 1910, § 4312.



§5260. Eminent domain extended to oil pipelines same as railroads.

Any oil pipeline company, organized under the laws of this state shall have power to exercise the right of eminent domain in like manner as railroad companies for the purpose of securing rightsofway and sites for pumping stations, storage tanks and depots.

R.L. 1910, § 3186.



§5261. Eminent domain, who may have Foreign corporations.

All persons, natural or artificial, except foreign corporations, shall have the right of eminent domain, and any right or privilege hereby conferred, when necessary to make effective the purposes of this article and the rights thereby conferred. Foreign corporations organized under the laws of any other state, or the United States, and doing or proposing to do business in this state, and which shall have become a body corporate pursuant to or in accordance with the laws of this state, and which, as hereby provided, shall have registered its acceptance of the terms hereof, shall receive all the benefits provided by this article.

R.L. 1910, § 4313.



§5262. Commission may extend time for filing plats.

Upon a sworn statement of the necessities which would justify a judicial continuance, the Corporation Commission is authorized to extend the time for the filing of the said plats, not, however, to exceed sixty (60) days.

R.L. 1910, § 4314.



§5263. Penalty for violations.

Any person, co-partnership, or corporation, its agent or employee, violating any of the provisions of this article, or any order of the competent courts of this state, or the Corporation Commission, pursuant to the jurisdiction conferred by this article, shall, upon conviction thereof, be fined a sum of not less than One Thousand Dollars ($1,000.00), nor more than Five Thousand Dollars ($5,000.00), or imprisonment for not less than six (6) months, nor more than one year, or by both such fine and imprisonment for each and every violation of this article; but in case the monthly runs or takings or transportations of oil shall average so as to be without discrimination, as herein provided, the transactions of any particular day, week, or portion of a month shall be disregarded; and the competent court of the county in which the omission or commission which is a violation of this article, has occurred, shall have jurisdiction of an action under the penal code for the punishment thereof; and said penalties shall not be exclusive of civil liability.

R.L. 1910, § 4315.



§5264. Suspension of penalty, when.

Whenever the operation of a valid order of a competent court or the Corporation Commission is duly suspended, according to law, the punitive provisions of this article shall likewise be suspended in their operation as to the transactions adjudicated in said court; and, further, any court having jurisdiction of an action brought by the state to punish for a violation under the terms of this article, shall not impose a punishment therefor greater than Five Hundred Dollars ($500.00) against any person or corporation, if it finds from the evidence that the violation was made solely with the object of testing according to law the validity of any of the provisions of this article, or of the order of any competent court or of the Corporation Commission, in any proceeding to carry out the provisions hereof.

R.L. 1910, § 4316.



§5265. Certified transcript shall be evidence.

A properly certified transcript of the report of any such corporation, association or person shall, as against the maker thereof, be prima facie evidence of the truth of any matter therein contained.

R.L. 1910, § 4317.



§52-66. Repealed by Laws 1980, c. 68, § 1, emerg. eff. April 10, 1980.

§52-67. Authorization for construction, siting, expansion or operation of crude oil or refined petroleum product pipeline facilities – Schedule of approval.

A. The Corporation Commission shall cooperate with and comply with deadlines established by the Federal Energy Regulatory Commission in regards to authorization for the construction, siting, expansion, or operation of crude oil or refined petroleum product pipeline facilities.

B. The Corporation Commission shall have the authority to establish a schedule for all state pipeline authorizations with respect to crude oil or refined petroleum product pipeline facilities. In establishing the schedule, the Commission shall:

1. Ensure expeditious completion of all proceedings; and

2. Accommodate the applicable schedules established by state law for such proceedings.

C. Any judicial appeal of the actions of the Commission shall be to an Oklahoma court of competent jurisdiction as provided for by the Constitution of the State of Oklahoma.

D. Upon application by a qualified applicant, the Commission shall issue an order authorizing, in whole or in part, the siting, construction, expansion, or operation of a crude oil or refined petroleum product pipeline facility which is located in either interstate or intrastate commerce.

E. If the holder of a Commission order issued pursuant to this section cannot acquire by contract, or is unable to agree with the owner of the property on the amount of compensation to be paid for:

1. The necessary right-of-way to site, construct, operate, and maintain a pipeline or pipelines for the transportation of crude oil or refined petroleum products; and

2. The necessary land or other property for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipeline or pipelines,

the holder of the order may acquire the property through the exercise of the right of eminent domain in an Oklahoma court of competent jurisdiction as allowed under the Constitution of the State of Oklahoma.

Added by Laws 2006, c. 261, § 8, eff. July 1, 2006.



§52-81. Repealed by Laws 1997, c. 275, § 15, eff. July 1, 1997.

§52-82. Repealed by Laws 1982, c. 354, § 11, operative July 1, 1982.

§52-83. Repealed by Laws 1997, c. 275, § 15, eff. July 1, 1997.

§52-84. Repealed by Laws 1947, c. 327, § 6.

§52-85. Repealed by Laws 1947, c. 327, § 6.

§52-86. Repealed by Laws 1947, c. 327, § 6.

§52-86.1. Definitions.

For the purposes of this act:

1. "Commission" means the Corporation Commission;

2. “Personâ€

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§52-87.1. Common source of supply of oil - Well spacing and drilling units.

Whenever the production from any common source of supply of oil or natural gas in this state can be obtained only under conditions constituting waste or drainage not compensated by counterdrainage, then any person having the right to drill into and produce from such common source of supply may, except as otherwise authorized or in this section provided, take therefrom only such proportion of the oil or natural gas that may be produced therefrom without waste or without such drainage as the productive capacity of the well or wells of any such person considered with the acreage properly assignable to each such well bears to the total productive capacities of the wells in such common source of supply considered with the acreage properly assignable to each well therein.

(a) To prevent or to assist in preventing the various types of waste of oil or gas prohibited by statute, or any of said wastes, or to protect or assist in protecting the correlative rights of interested parties, the Corporation Commission, upon a proper application and notice given as hereinafter provided, and after a hearing as provided in said notice, shall have the power to establish well spacing and drilling units of specified and approximately uniform size and shape covering any common source of supply, or prospective common source of supply, of oil or gas within the State of Oklahoma; provided, that the Commission may authorize the drilling of an additional well or wells on any spacing and drilling unit or units or any portion or portions thereof or may establish, reestablish, or reform well spacing and drilling units of different sizes and shapes when the Commission determines that a common source of supply contains predominantly oil underlying an area or areas and contains predominantly gas underlying a different area or areas; provided further that the units in the predominantly oil area or areas shall be of approximately uniform size and shape, and the units in the predominantly gas area or areas shall be of approximately uniform size and shape, except that the units in the gas area or areas may be of nonuniform size and shape when they adjoin the units in the oil area or areas; provided further that the drilling pattern for such nonuniform units need not be uniform, and provided further that the Commission shall adjust the allowable production within said common source of supply, or any part thereof, and take such other action as may be necessary to protect the rights of interested parties. Any order issued pursuant to the provisions hereof may be entered after a hearing upon the petition of any person owning an interest in the minerals in lands embraced within such common source of supply, or the right to drill a well for oil or gas on the lands embraced within such common source of supply, or on the petition of the Conservation Officer of the State of Oklahoma. When such a petition is filed with the Commission, the Commission shall give at least fifteen (15) days' notice of the hearing to be held upon such petition by one publication, at least fifteen (15) days prior to the hearing, in some newspaper of general circulation published in Oklahoma County, and by one publication, at least fifteen (15) days prior to the date of the hearing, in some newspaper published in the county, or in each county, if there be more than one, in which the lands embraced within the application are situated. Except as to the notice of hearing on such a petition, the procedural requirements of Sections 86.1 et seq. of this title, shall govern all proceedings and hearings provided for by this section.

(b) In case of a spacing unit of one hundred sixty (160) acres or more, no oil and/or gas leasehold interest outside the spacing unit involved may be held by production from the spacing unit more than ninety (90) days beyond expiration of the primary term of the lease.

(c) In establishing a well spacing or drilling unit for a common source of supply thereunder, the acreage to be embraced within each unit shall not exceed six hundred forty (640) acres for a gas well plus ten percent (10%) tolerance, unless a governmental section contains more than six hundred forty (640) acres in which case the unit may comprise the entire section. Provided, however, fractional sections along the state boundary line and within the townships along the boundary where the survey west of the Indian Meridian meets the survey east of the Cimarron Meridian may be spaced with adjoining section unit, and the shape thereof shall be determined by the Commission from the evidence introduced at the hearing, and the following facts, among other things, shall be material: (1) The lands embraced in the actual or prospective common source of supply; (2) the plan of well spacing then being employed or contemplated in said source of supply; (3) the depth at which production from said common source of supply has been or is expected to be found; (4) the nature and character of the producing or prospective producing formation or formations; and (5) any other available geological or scientific data pertaining to said actual or prospective source of supply which may be of probative value to said Commission in determining the proper spacing and well drilling unit therefor, with due and relative allowance for the correlative rights and obligations of the producers and royalty owners interested therein.

The order establishing such spacing or drilling units shall set forth: (1) the outside boundaries of the surface area included in such order; (2) the size, form, and shape of the spacing or drilling units so established; (3) the drilling pattern for the area, which shall be uniform except as hereinbefore provided; and (4) the location of the permitted well on each such spacing or drilling unit. To such order shall be attached a plat upon which shall be indicated the foregoing information. Subject to other provisions of this act, Section 81 et seq. of this title, the order establishing such spacing or drilling units shall direct that no more than one well shall thereafter be produced from the common source of supply on any unit so established, and that the well permitted on that unit shall be drilled at the location thereon as prescribed by the Commission, with such exception as may be reasonably necessary where it is shown, upon application, notice and hearing in conformity with the procedural requirements of Sections 86.1 et seq. of this title, and the Commission finds that any such spacing unit is located on the edge of a pool and adjacent to a producing unit, or for some other reason that to require the drilling of a well at the prescribed location on such spacing unit would be inequitable or unreasonable. Whenever such an exception is granted, the Commission shall adjust the allowable production for said spacing unit and take such other action as may be necessary to protect the rights of interested parties.

Any well spacing or drilling unit for a common source of supply thereunder which exceeds six hundred forty (640) acres for a gas well plus ten percent (10%) tolerance or exceeds the total amount of acreage contained in a governmental section, and is not in production or in the process of drilling development on the effective date of this act shall be despaced. However, fractional sections along the state boundary line and within the townships along the boundary where the survey west of the Indian Meridian meets the survey east of the Cimarron Meridian may be spaced with adjoining section unit, and the shape thereof shall be determined by the Commission.

(d) The Commission shall have jurisdiction upon the filing of a proper application therefor, and upon notice given as provided in subsection (a) above, to decrease the size of the well spacing units or to permit additional wells to be drilled within the established units, upon proper proof at such hearing that such modification or extension of the order establishing drilling or spacing units will prevent or assist in preventing the various types of wastes prohibited by statute, or any of said wastes, or will protect or assist in protecting the correlative rights of persons interested in said common source of supply, or upon the filing of a proper application therefor to enlarge the area covered by the spacing order, if such proof discloses that the development or the trend of development indicates that such common source of supply underlies an area not covered by the spacing order and such proof discloses that the applicant is an owner within the area or within a drilling and spacing unit contiguous to the area covered by the application. Except in the instance of reservoir dewatering as described herein, the Commission shall not establish well spacing units of more than forty (40) acres in size covering common sources of supply of oil, the top of which lies less than four thousand (4,000) feet below the surface as determined by the original or discovery well in said common source of supply, and the Commission shall not establish well spacing units of more than eighty (80) acres in size covering common sources of supply of oil, the top of which lies less than nine thousand nine hundred ninety (9,990) feet and more than four thousand (4,000) feet below the surface as determined by the original or discovery well in said common source of supply. In the instance of reservoir dewatering to extract oil from reservoirs having initial water saturations at or above fifty percent (50%), the Commission may establish drilling and spacing units not to exceed six hundred forty (640) acres in size.

(e) The drilling of any well or wells into any common source of supply for the purpose of producing oil or gas therefrom, after a spacing order has been entered by the Commission covering such common source of supply, at a location other than that fixed by said order is hereby prohibited. The drilling of any well or wells into a common source of supply, covered by a pending spacing application, at a location other than that approved by a special order of the Commission authorizing the drilling of such well is hereby prohibited. The operation of any well drilled in violation of any spacing so entered is also hereby prohibited. When two or more separately owned tracts of land are embraced within an established spacing unit, or where there are undivided interests separately owned, or both such separately owned tracts and undivided interests embraced within such established spacing unit, the owners thereof may validly pool their interests and develop their lands as a unit. Where, however, such owners have not agreed to pool their interests and where one such separate owner has drilled or proposes to drill a well on said unit to the common source of supply, the Commission, to avoid the drilling of unnecessary wells, or to protect correlative rights, shall, upon a proper application therefor and a hearing thereon, require such owners to pool and develop their lands in the spacing unit as a unit. The applicant shall give all the owners whose addresses are known or could be known through the exercise of due diligence at least fifteen (15) days' notice by mail, return receipt requested. The applicant shall also give notice by one publication, at least fifteen (15) days prior to the hearing, in some newspaper of general circulation published in Oklahoma County, and by one publication, at least fifteen (15) days prior to the date of the hearing, in some newspaper published in the county, or in each county, if there be more than one, in which the lands embraced within the spacing unit are situated. The applicant shall file proof of publication and an affidavit of mailing with the Commission prior to the hearing. All orders requiring such pooling shall be made after notice and hearing, and shall be upon such terms and conditions as are just and reasonable and will afford to the owner of such tract in the unit the opportunity to recover or receive without unnecessary expense his just and fair share of the oil and gas. The portion of the production allocated to the owner of each tract or interests included in a well spacing unit formed by a pooling order shall, when produced, be considered as if produced by such owner from the separately owned tract or interest by a well drilled thereon. Such pooling order of the Commission shall make definite provisions for the payment of cost of the development and operation, which shall be limited to the actual expenditures required for such purpose not in excess of what are reasonable, including a reasonable charge for supervision. In the event of any dispute relative to such costs, the Commission shall determine the proper costs after due notice to interested parties and a hearing thereon. The operator of such unit, in addition to any other right provided by the pooling order or orders of the Commission, shall have a lien on the mineral leasehold estate or rights owned by the other owners therein and upon their shares of the production from such unit to the extent that costs incurred in the development and operation upon said unit are a charge against such interest by order of the Commission or by operation of law. Such liens shall be separable as to each separate owner within such unit, and shall remain liens until the owner or owners drilling or operating the well have been paid the amount due under the terms of the pooling order. The Commission is specifically authorized to provide that the owner or owners drilling, or paying for the drilling, or for the operation of a well for the benefit of all shall be entitled to production from such well which would be received by the owner or owners for whose benefit the well was drilled or operated, after payment of royalty, until the owner or owners drilling or operating the well have been paid the amount due under the terms of the pooling order or order settling such dispute. No part of the production or proceeds accruing to any owner of a separate interest in such unit shall be applied toward payment of any cost properly chargeable to any other interest in said unit.

For the purpose of this section, the owner or owners of oil and gas rights in and under an unleased tract of land shall be regarded as a lessee to the extent of a seveneighths (7/8) interest in and to said rights and a lessor to the extent of the remaining oneeighth (1/8) interest therein. Should the owners of separate tracts or interests embraced within a spacing unit fail to agree upon a pooling of their interests and the drilling of a well on the unit, and should it be established by final, unappealable judgment of a court of competent jurisdiction that the Commission is without authority to require pooling as provided for herein, then, subject to all other applicable provisions of this act, the owner of each tract or interest embraced within a spacing unit may drill on his separately owned tract, and the allowable production therefrom shall be that portion of the allowable for the full spacing unit as the area of such separately owned tract bears to the full spacing unit.

In the event a producing well or wells are completed upon a unit where there are, or may thereafter be, two or more separately owned tracts, each royalty interest owner shall share in all production from the well or wells drilled within the unit, or in the gas well rental provided for in the lease covering such separately owned tract or interest in lieu of the customary fixed royalty, to the extent of such royalty interest owner's interest in the unit. Each royalty interest owner's interest in the unit shall be defined as the percentage of royalty owned in each separate tract by the royalty owner, multiplied by the proportion that the acreage in each separately owned tract or interest bears to the entire acreage of the unit.

(f) Notwithstanding any provision of this section to the contrary, the Corporation Commission shall have jurisdiction upon the filing of a proper application therefor, and upon notice given as provided in subsection (a) above, to establish spacing rules for horizontally drilled oil wells whereby horizontally drilled oil wells may have well spacing units established of up to six hundred forty (640) acres plus tolerances and variances as allowed for gas wells pursuant to subsection C of this section. For purposes of this subsection a "horizontally drilled oil well" shall mean an oil well drilled, completed or recompleted in a manner in which the horizontal component of the completion interval in the geological formation exceeds the vertical component thereof and which horizontal component extends a minimum of one hundred fifty (150) feet in the formation. The Corporation Commission shall promulgate rules necessary for the proper administration of this subsection.

Added by Laws 1947, p. 328, § 1, emerg. eff. April 29, 1947. Amended by Laws 1959, p. 217, § 1, emerg. eff. July 15, 1959; Laws 1963, c. 121, § 1, emerg. eff. June 3, 1963; Laws 1971, c. 246, § 1, emerg. eff. June 16, 1971; Laws 1977, c. 76, § 1, emerg. eff. May 25, 1977; Laws 1980, c. 33, § 1, emerg. eff. March 26, 1980; Laws 1982, c. 10, § 1, emerg. eff. March 15, 1982; Laws 1984, c. 58, § 1, emerg. eff. March 28, 1984; Laws 1985, c. 141, § 2; Laws 1988, c. 205, § 1, eff. Nov. 1, 1988; Laws 1990, c. 310, § 1, eff. Sept. 1, 1990; Laws 1992, c. 190, § 17, eff. July 1, 1993; Laws 2001, c. 256, § 1, emerg. eff. May 23, 2001; Laws 2007, c. 331, § 2, emerg. eff. June 4, 2007.



§5287.2. Protest of applications relating to spacing units Proper parties Intervention Report by Corporation Commission.

A. Except as provided in subsection B of this section, only those persons, or the duly authorized agent, representative or attorney of those persons, who are mineral owners or owners of the right to drill a well for oil and gas on the lands embraced within the subject area of an application or the owners of correlative rights within the common source of supply or supplies embraced within an application to the extent such owners are directly affected by such application, shall be proper parties to:

1. protest any application to establish, reestablish, or reform a spacing unit,

2. protest any application requesting authority for an additional well or wells within an established spacing unit brought pursuant to the provisions of paragraph (a) or (d) of Section 87.1 of Title 52 of the Oklahoma Statutes, or

3. present testimony or evidence at any hearing arising thereunder or relating thereto.

B. No other person shall be entitled to notice of such proceeding or shall be entitled to appear as a party of record therein, except that the Corporation Commission may permit persons other than those specified in subsection A of this section leave to intervene in a proceeding upon a finding, based upon clear and convincing evidence, that such person has a substantial right intended to be protected by Section 87.1 of Title 52 of the Oklahoma Statutes which may adversely be affected by the outcome of such proceeding. Any finding required by this section shall be made by the Corporation Commission, sitting en banc, within ten (10) days of the filing of a motion to intervene by such person and such proceeding shall be stayed during such tenday period.

C. At the end of each calendar quarter the Corporation Commission shall file a written report with the Office of the Governor, the Speaker of the Oklahoma House of Representatives, and the President Pro Tempore of the Oklahoma State Senate describing all such findings made by the Corporation Commission pursuant to this section during such period.

Added by Laws 1988, c. 95, § 1, emerg. eff. April 1, 1988.



§52-87.3. Application or petition for location exception - Notice of hearing.

A. When any petition or application is filed with the Corporation Commission for a location exception from any spacing or drilling unit, the Commission shall give notice of the hearing to be held upon such petition or application, as provided in Section 87.1 of Title 52 of the Oklahoma Statutes. Such notice shall specifically identify the proposed well location, by legal description, in order to give proper notice to owners of land adjacent to the proposed well location whether within or without the same spacing or drilling unit as such proposed well location.

B. If the location exception allows a proposed well location to be placed closer than one thousand three hundred twenty (1,320) feet to a section line for a gas well or closer than three hundred thirty (330) feet to a section line for an oil well, the notice specified in subsection A of this section shall identify, by legal description, the land sections adjacent to the area within the location exception.

Added by Laws 1990, c. 310, § 2, eff. Sept. 1, 1990.



§52-87.4. Affidavit of election for drilling well under pooling order.

An affidavit evidencing any election for the drilling of a well under a pooling order issued pursuant to the proceedings set out in subsection (e) of Section 87.1 of Title 52 of the Oklahoma Statutes shall constitute constructive notice of the rights under the election claimed by the affiant when the affidavit is filed of record in the office of the county clerk for the county in which the lands described in the pooling order are located. The affidavit shall set out the name, address, if known, and election or deemed election for each pooled respondent included in the affidavit and shall have a copy of the pooling order attached. The affidavit may be filed by the operator designated in the pooling order or by any other interested party with knowledge of any election made. Filing of the affidavit shall not affect notice provided by virtue of pooling proceedings conducted by the Commission.

Added by Laws 1993, c. 337, § 1, eff. July 1, 1993.



§52-87.5. Applications for approval of increased density wells – Notice and hearing.

A. When any application is filed with the Corporation Commission for approval of an increased density well in any drilling and spacing unit, notice of the hearing to be held upon such application shall be given by the applicant to:

1. Those persons, including government entities, entitled to oil or gas or the proceeds of oil or gas produced from the common source of supply in the drilling and spacing unit for which the application for an increased density well has been filed; and

2. The operator, as shown by the records of the Commission, of each well which is commencing or currently producing from the same common source of supply in the drilling and spacing unit or any separate tract of land immediately surrounding the drilling and spacing unit for such an increased density well.

B. If the applicant is seeking approval of an increased density well to be completed in a common source of supply for which the Commission has established field rules, and for which no application for an increased density well in such common source of supply has been approved by the Commission subsequent to January 1, 1998, and prior to the effective date of this act, notice shall also be given to the operator, as shown by the records of the Commission, of each well commencing or currently producing from that same common source of supply governed by the field rules.

C. If the applicant is the operator of a well commencing or currently producing from the same common source of supply applicable to the increased density well in a drilling and spacing unit or a separate tract of land immediately surrounding the drilling and spacing unit for such increased density well, notice shall also be given to each owner, as shown by the records of the operator, with a working interest in such well in such common source of supply.

D. The notices required by subsections A, B and C of this section shall be given by mailing by regular mail no less than fifteen (15) days prior to the date of the hearing.

E. No person except for those persons provided for in this section shall be entitled to notice of the hearing on an application for approval of an increased density well in any drilling and spacing unit.

F. The Commission shall require that notice of the hearing be published one time at least fifteen (15) days prior to the hearing in a newspaper of general circulation published in each county in which the lands embraced in the application are located. If the increased density well is to be completed in a common source of supply for which the Commission has established field rules and for which no application for an increased density well in such common source of supply has been approved by the Commission subsequent to January 1, 1998, and prior to the effective date of this act, notice of the hearing shall also be published one time at least fifteen (15) days prior to the hearing in a newspaper of general circulation published in each county in which the lands subject to the field rules are located.

Added by Laws 1999, 1st Ex.Sess., c. 3, § 1, emerg. eff. June 21, 1999.



§52-88. Repealed by Laws 1947, c. 331, § 1.

§52-89. Repealed by Laws 1947, c. 331, § 1.

§52-90. Repealed by Laws 1947, c. 327, § 6.

§5291. Meters on pipelines Commission to designate type Inspection Cost of operation.

The Commission is hereby empowered and authorized by its orders, rules, and regulations, to require that meters be installed (a) upon any pipeline used in purchasing and/or transporting oil in or out of any prorated common source of supply and/or from storage adjacent thereto and (b) upon any pipeline used in gathering and/or transporting oil from leases or storage in such common source of supply, to refineries, loading racks, and field or other storage, and/or to deliver such oil to other transportation lines in or near such fields. All meters installed pursuant to any order, rule or regulation of the Commission made or issued by it under the provisions of this section shall be of a type or types approved by it and the Proration Umpire shall be in mechanical construction and accuracy in operation, sufficient to register the oil transported through the pipeline or pipelines upon which such meters are installed with a degree of accuracy of not more than two percent (2%) from accurate. Said meters shall be installed and maintained at the cost and expense of the owner and/or operators of the pipelines on which the same are required to be installed. No owner or operator of any such pipeline upon which a meter or meters shall have been installed and/or is being maintained pursuant to orders, rules and regulations of the Commission made hereunder, shall operate such pipeline or pipelines at any time when the meter or meters thereon are not properly registering the flow of oil to the knowledge of such owner or operator or when by the exercise of reasonable diligence he or it should have known thereof, except or unless permission to do so by order of the Commission shall have been granted. Said meters shall at all times be subject to inspection and reading by the Proration Umpire, his deputies, or any person authorized and ordered by the Commission to inspect or read the same. The provisions of this section shall be applied and enforced by the Commission only when it finds and holds that the installation of such meter or meters is necessary to the enforcement of this act, and the installation of meters shall not be required generally, and for other purposes as a means of measuring oil.

Added by Laws 1933, c. 131, p. 281, § 8, emerg. eff. April 10, 1933.



§5292. Reports Oil purchased or transported Forms Verification.

The Commission is hereby authorized and empowered by orders, rules or regulations issued by it to require all takers of oil in or out of any prorated common source of supply to make and file periodically with the Commission, at such time or times, as often as the Commission shall in such orders, rules, and regulations provide, reports of all oil purchased and/or transported by such takers within or from such prorated fields, and that duplicate copies thereof shall be filed with the Proration Umpire. Said reports shall be upon forms prescribed by the Commission and shall describe the leases and properties, and, if ordered by the Commission, the wells from which crude oil has been taken by any such taker, and the amount thereof, and shall contain such other information as will enable or assist the Commission in enforcing the provisions of this act, which may be required by the orders, rules and regulations of the Commission; and shall be verified by the maker thereof upon oath.

Added by Laws 1933, c. 131, p. 281, § 8, emerg. eff. April 10, 1933.



§5293. Operators Books Oil produced and sold.

Every operator in any prorated common source of supply shall, when required by any rule, order, or regulation of the Commission, keep books showing accurately (a) the amount of oil produced daily from each lease or property operated by him or it and, if the Commission shall order, from each well owned or operated by him or it on each such lease or property, and (b) the amount of oil sold or otherwise disposed of each day from each of his or its said properties, and, when so required by the order of the Commission, from each of his or its wells thereon and to whom the same is sold and delivered. Said books and all documents and records made by any such operator relating to the operation of his or its properties or wells in any such prorated common source of supply shall at all times be open for the inspection of the Commission or any officer, agent or employee authorized and directed by the Commission by its order to inspect or examine the same; and shall, upon the order of the Commission or the request of any such authorized officer, agent or employee be made immediately available for such inspection.

Added by Laws 1933, c. 131, p. 282, § 10, emerg. eff. April 10, 1933.



§5294. Maps and drawings Location of pipelines and connections Verification.

The Commission may require any and all operators in any prorated common source of supply to file with it maps or drawings which shall show the location of all pipelines, connections, pumps and tanks, the size and capacities thereof used for producing or transporting oil from each well owned by such operator in such common source of supply, and may likewise require the takers of oil from such common source of supply to file with the Commission maps and drawings showing the pipelines, connections, tanks, size and capacity thereof used by such takers in taking or transporting oil from such common source of supply and from each and all wells therein. The correctness of such maps and drawings shall be verified upon oath as shall be provided by the orders, rules or regulations of the Commission.

Added by Laws 1933, c. 131, p. 283, § 11, emerg. eff. April 10, 1933.



§5295. Reports Quantity of oil produced and moved Penalty.

The Commission shall by order require every operator in each prorated common source of supply to file periodically with it when and as often as required, and upon forms approved by it, reports which shall show (a) the quantity of oil produced, and the quantity of oil removed by each operator from his or its each lease or property in said common source of supply, and unless otherwise provided by rule or regulation of the Commission, from his or its each well in said common source of supply, and (b) the amount of oil run to storage, delivered to common carrier, or to a purchaser or transporter through the operator's own pipeline, and, in the latter case to what destination, and the name or names of the person or persons purchasing or taking such oil, and which shall contain such further information as may be required by the Commission.

If any operator shall fail or refuse to file any report or reports required by this section or by any order, rule or regulation of the Commission made in pursuance of this section, in addition to the other penalties provided for in this act for such violation, the Commission may by its order require that said operator shall discontinue to produce any oil from any leasehold, property or well with respect to which such operator has failed or refused to make and file such report, until he or it shall have filed same; provided when any such operator shall have filed with the Commission any such report or reports as required by this section, or any order, rule or regulation of the Commission, the Commission shall permit such operator to produce his or its well or wells, theretofore shut down by such order of the Commission, so as to recover and make up the oil that such operator would have been lawfully entitled to produce during the period such well or wells were shut down, if the order of the Commission requiring him or it to discontinue or reduce production of oil therefrom until such report or reports were filed had not been made.

Added by Laws 1933, c. 131, p. 283, § 12, emerg. eff. April 10, 1933.

Author:  admin [ Tue Apr 26, 2011 2:53 pm ]
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§5296. Verification of reports, statements, maps and drawings.

When by an order, rule or regulation of the Commission made in pursuance of this act, any report, statement, map or drawing duly verified, is required to be filed with the Commission or any other officer, by any firm, trust, association or corporation, such report, statement, map or drawing shall be verified by (a) such member, agent or employee of such firm, trust or association, and (b) such officer or officers, agent or employee of such corporation as shall be provided or required by order, rule or regulation of the Commission.

Added by Laws 1933, c. 131, p. 284, § 13, emerg. eff. April 10, 1933.



§5297. Commission Jurisdiction to make orders, rules and regulations Hearings.

The Commission upon its own motion, or upon the petition of the Attorney General, or of the Conservation Attorney, or of the Director of Conservation, on behalf of the state, or of any operator, producer, or taker of oil from any common source of supply, to be affected by any such order, rule or regulation, filed with the Commission, shall have jurisdiction to make any and all orders, rules and regulations authorized and/or provided for in Sections 1 to 13 of this act, inclusive, provided that said orders, rules, and regulations shall be made only after a hearing before the Commission, of which the Commission shall have given at least ten (10) days' notice, by one publication of such notice in some newspaper of general circulation published in Oklahoma County, Oklahoma, at which hearing the Attorney General, or the Conservation Attorney or the Director of Conservation upon behalf of the state, any operator or taker or producer of oil from any common source of supply, or any other person interested in such common source or sources of supply to be affected by the order, rule or regulation sought, shall have an opportunity to offer evidence and to be heard in support of or in opposition to such motion or petition for such order, rule, or regulation. Such notice of hearing shall be signed by at least a majority of the members of the Commission and shall specify (a) the time and place of hearing, (b) briefly the general nature of the order or orders, rule or rules, regulation or regulations sought in the proceeding before the Commission, and (c) the name or names or general description of the common source or sources of supply that may be affected by any such rule, order, or regulation, unless by such motion or petition filed the order or orders, rule or rules, regulation or regulations sought are intended to apply and affect the entire state.

With respect to any motion or petition filed under the provisions of this act, the service of notice thereof and any hearing thereon, and any order, rule or regulation, made thereon, the Commission shall have the power of a court of record, and shall have the further powers and authority with respect thereto enumerated and provided in Section 98 of this title; provided, that the Commission upon the date set or fixed in the notice of hearing in any proceeding commenced under the provisions of this section, or at the time of such hearing therein, or of making any order or orders, rule or rules, regulation or regulations therein, may by its order provide that said proceeding shall be continued upon the docket of the Commission for further hearing or hearings therein, and for the issuance and/or promulgation of further order or orders, rule or rules, or regulation or regulations by the Commission therein, modifying, supplementing, repealing or vacating any previous order, rule or regulation of the Commission therein as it shall determine; and if the Commission shall, in any such order, rule or regulation continuing any such case upon its docket for further hearings and orders therein, fix the time and place of such hearing or hearings, no further notice thereof shall be required; but if the Commission shall not, in its orders continuing upon its docket any such proceeding for further hearings and orders therein, fix the time and place of such hearing or hearings, then no further hearing therein shall be had until notice thereof shall have been given for the same length of time and in the same manner provided in this act for notice of the initial hearing in said proceeding.

Added by Laws 1933, c. 131, § 14, emerg. eff. April 10, 1933. Amended by Laws 1992, c. 93, § 1, eff. Sept. 1, 1992.



§5298. Powers of Commission Marshal of Commission.

In all matters pertaining to the making, issuing and enforcement of its orders, rules and regulations made under the provisions of this act, the Commission shall have and exercise all of the following powers and authority; to wit (1) Of visitation and of a court of record; (2) To administer oaths; (3) To compel attendance of witnesses; (4) To compel the production of books and records; (5) To punish for contempt any person guilty of any disrespectful or disorderly conduct in the presence of the Commission while in session; (6) To punish as for contempt any disobedience or violation of the provisions of this act and of any of its orders, rules, regulations, and judgments made or rendered by it under and in pursuance of the provisions of this act; (7) To enforce the provisions of this act, and compliance with any of its orders, rules, regulations or judgments by appropriate process, and by shut down orders, ordering and directing the shutting down or discontinuance of production of oil from any well or wells of or operated by the offender with respect to which complaint has been made; and by orders or writs remedial or otherwise necessary or proper, to carry into effect its orders, rules and regulations; (8) To appoint or designate one of its agents or employees or one of the deputies to the Proration Umpire to act as Marshal of the Commission, who shall serve as such Marshal during its pleasure without additional compensation for such services, and who shall attend the sessions of the Commission, and when directed by it shall serve and execute orders, subpoenas, commitments and other process issuing from it.

Added by 1933, c. 131, p. 285, § 15, emerg. eff. April 10, 1933.



§5299. Filing of papers and documents Use as evidence.

When under any provision of this act or of any order, rule or regulation made in pursuance of this act, any petition, motion, return, pleading, report, statement, map or drawing is required to be filed with the Commission, the same shall be deemed to be filed when filed with the Secretary of the Commission. Duplicate copies of all reports, statements, maps or drawings shall also be filed with the Proration Umpire. The original or any copy of any such reports, maps, drawings, statements or other documents duly certified by the Secretary of the Commission, when the contents thereof are material to the issues involved, shall be competent and admissible in evidence in any proceedings and hearings therein brought or had under the provisions of Section One (1) to Thirteen (13), inclusive, of this act; and any such original or certified copy thereof shall, in any proceeding upon complaint or prosecution as for contempt against any person for violation of this act or of any order, rule or regulation of the Commission, be competent and admissible in evidence to establish admissions against interest made by any defendant or defendants to such complaint or prosecution who filed or caused to be filed such report, map, drawing, statement or other document.

Added by Laws 1933, c. 131, p. 286, § 16, emerg. eff. April 10, 1933.



§52100. Witnesses Depositions.

The Commission may cause depositions of witnesses residing within or without the state to be taken in any proceeding pending before it in any manner provided by law for taking depositions in civil actions in courts of record; and any deposition so taken shall be sealed up and endorsed with the title of the cause and the name of the officer taking the same, and by him addressed and transmitted to the Secretary of the Commission, where it shall remain under seal until opened by the Secretary on order of the Commission, or at the request of a party to the proceeding, or an attorney for such party.

Added by Laws 1933, c. 131, p. 286, § 17, emerg. eff. April 10, 1933.



§52101. Procedure Rules of Enforcement of orders and rules.

The Commission shall have power with or without any notice of hearing to make and promulgate rules of procedure not inconsistent with the provisions of this act to govern the filing, prosecution, hearing, and determination of proceedings authorized to be brought before the Commission and for the enforcement of its orders, rules and regulations made under the provisions of this act; provided, that no order, rule or regulation of the Commission and no order made in the enforcement thereof shall be held void or be reversed merely because the Commission may not have promulgated procedural rules.

Added by Laws 1933, c. 131, p. 286, § 18, emerg. eff. April 10, 1933.



§52102. Contempt Punishment Enforcement of fines Disposition of fines and penalties.

Punishment for contempt by the Commission of any person, guilty of any disrespectful or disorderly conduct in the presence of the Commission while in session, or for disobedience of its subpoena, summons or other process, may be by fine not exceeding One Thousand Dollars ($1,000.00) or by confinement in the county jail of Oklahoma County not exceeding one (1) year, or by both. Any person who shall disobey or violate any of the provisions of Section 86.1 et seq. of this title or any of the orders, rules, regulations or judgments of the Commission issued, promulgated or rendered by it, shall be punished as for contempt. Punishment by the Commission in proceedings as for contempt for disobedience or violation of any provision of Section 86.1 et seq. of this title or any of its orders, rules, regulations or judgments, issued, promulgated or rendered under the provisions of Section 86.1 et seq. of this title shall be by fine not exceeding in amount Five Thousand Dollars ($5,000.00), and each day such disobedience or violation shall continue shall constitute a separate and additional contempt, and shall be punished by separate and additional fines each in amount not in excess of aforesaid amount. Any fine or penalty assessed under the provisions of Section 86.1 et seq. of this title may be enforced in the same manner as a foreign judgment pursuant to the Uniform Enforcement of Foreign Judgments Act, Section 719 et seq. of Title 12 of the Oklahoma Statutes provided that such procedure shall be followed regardless of whether the offender is a resident or nonresident of Oklahoma. Such fine or penalty shall constitute and be a lien upon all the property of the offender within the state, except the homestead of such offender, provided that a copy of the order imposing the fine or penalty, certified by the Secretary of the Commission, is filed in accordance with Section 706 of Title 12 of the Oklahoma Statutes. All monies collected as fines or penalties under the provisions of Section 86.1 et seq. of this title shall, when paid into or received by the Commission, be by it paid to the State Treasurer of the state for the credit of the Corporation Commission Revolving Fund.

Added by Laws 1933, c. 131, § 19, emerg. eff. April 10, 1933. Amended by Laws 1975, c. 285, § 5, emerg. eff. June 5, 1975; Laws 1984, c. 284, § 16, operative July 1, 1984; Laws 1990, c. 107, § 4, eff. Oct. 1, 1990.



§52103. Contempt Proceedings How commenced Complaint Citation.

Proceedings as for contempt for disobedience or violation of the provisions of this act or of the orders, rules, regulations and judgments of the Commission made, issued and/or rendered under the provisions of this act, may be commenced by the filing with the Commission by (a) the Attorney General, or (b) the Proration Attorney, or (c) the Proration Umpire, or (d) Assistant Proration Umpire, or (e) by any producer of oil or taker in the state, of a complaint which shall, when filed by any producer of oil or taker, be verified upon information and belief. Said complaint by whomsoever filed shall state, (a) the name of the person, firm, trust, corporation, or association against whom the complaint is made; (b) the order or orders, rule or rules, regulation or regulations and judgment or judgments of the Commission, violation of which is charged; (c) and briefly in general terms the acts or omissions of the defendant constituting the violation of which complaint is made. Any such complaint may charge against any defendant one or more violations of the provisions of this act and/or of any rule, order or regulation of the Commission made hereunder; provided, that the acts or omissions of the defendant constituting each violation charged shall be briefly stated in general terms in separately numbered paragraphs or counts of such complaint. Upon the filing of any such complaint the Secretary of the Commission shall issue in the name of the state by him as Secretary of the Commission, addressed to the defendant or defendants, a citation to the defendant or defendants in said complaint, to which shall be attached a copy of said complaint. Said citation shall state (a) the date on which and by whom said complaint was filed and the name of the complainant, (b) a brief general description of the nature of the complaint, (c) a reference to copy of the complaint which shall be attached to said notice, (d) the date on which said complaint is set for hearing, which shall not be earlier than ten (10) days from the date of such citation, and (e) a statement that unless the defendant shall on or before said date for hearing file his or its pleadings to such complaints, allegations and charges therein contained, the same shall be taken as confessed. Service of said citation in such proceedings for contempt shall be had and return thereof made as hereinafter provided.

Added by Laws 1933, c. 131, p. 287, § 20, emerg. eff. April 10, 1933.



§52104. Right of entry and inspection by conservation officer, his assistants and deputies.

The Proration Umpire, his assistant and deputies shall have the right at all times to go upon and inspect oil and gas properties from which oil or gas is being produced, pipelines, tank farms, and pump stations, for the purpose of ascertaining whether the provisions of this act and the orders, rules, regulations and judgments of the Commission made in pursuance of the provisions of this act are being complied with, and shall report to the Commission any violation thereof.

Added by Laws 1933, c. 131, p. 288, § 21, emerg. eff. April 10, 1933.



§52105. Power to close wells Orders regulating flow and production Motion or petition for order Temporary orders.

The Commission shall have the power to order closed, and by the Proration Umpire, his assistant and deputies, to close any well or wells which have been overproduced or which are being overproduced in violation of this act and/or of the orders, rules and regulations of the Commission and/or to order that the production of oil from such well or wells shall be reduced, until such condition of overproduction of any such well or wells has been equalized so that the operator of such well or wells shall not be permitted to take therefrom a greater amount of oil than is permitted under the provisions of this act and/or the orders, rules and regulations of the Commission, made in pursuance of the provisions of this act; and may issue and enforce other orders to regulate the flow and production of oil and gas in such common source of supply for the purpose of preventing or stopping violations of its orders, rules or regulations, prescribing proration of production or ratable taking of oil in any common source of supply. Said orders of enforcement may be issued by the Commission upon its own motion, or upon written petition filed by (a) the Attorney General, or (b) the Proration Attorney, or (c) the Proration Umpire, in the name of the state; or by any person interested in the proration or ratable taking of oil from any common source of supply where any such violation of the orders, rules or regulations of the Commission is alleged to have occurred. Said motion or petition for such orders of enforcement shall be filed with the Secretary of the Commission and shall state the name of the violator or violators and the provision of the statute, or the order, rule or regulation which it is charged are being violated, and briefly in general language the act or acts, omission or omissions, done or being done by the alleged violator or violators which constitute the violation of statute or of the order, rule or regulation of the Commission complained of. Any such petition, other than motions by the Commission for such enforcement orders, shall be verified by the officer or person filing the same, but such verification may be made upon affiant's best information and belief. Whenever any such motion or petition for an order of enforcement shall charge that the violation or violations by the defendant therein of the provisions of this act or of orders, rules and regulations of the Commission complained of, is that defendant has produced or is producing oil from any well or wells in any common source of supply at a rate in excess of that allowed by the orders, rules and regulations of the Commission applicable thereto, the Commission, in its discretion, may, at the time of the filing of any such motion or petition, or at any time thereafter prior to its final hearing thereon and issuance of final or permanent order in such proceeding, make or issue a temporary order or orders, ordering and directing the defendant or defendants in any such proceeding to shut down and discontinue immediately, or to curtail the production of oil from any well or wells alleged to be involved in the violations complained of so as to comply with the orders, rules and regulations of the Commission; and said temporary order may further provide and require that if the defendant or defendants shall fail to shut down or curtail the production from any such well or wells so ordered in the manner required by such order of the Commission within twentyfour (24) hours from the time of service of said order, the Proration Umpire, his assistant or deputies shall thereupon go upon the premises upon which said well or wells are located, and shut down the production of oil from said well or wells until the hearing provided in said temporary order of the Commission shall have been held, and/or until the Commission shall otherwise order. The defendant or defendants against whom any such temporary order has been issued shall have the right to appear before the Commission at any time prior to the date for hearing in said proceeding and move that such temporary order be dissolved or modified, and show cause to the Commission why same should be done. The Commission upon hearing any such motion, which shall be promptly heard, and may be had with or without notice thereof to the petitioner, may in its discretion dissolve or modify such temporary order or continue the same until final hearing in said cause shall have been held. Provided, however, that if upon final hearing before the Commission in such proceeding, or upon appeal to the Supreme Court, if an appeal from the decision of the Commission in such proceeding shall be taken, it shall be determined that any such temporary order was wrongfully issued by the Commission, the defendant or defendants shall be permitted to produce their well or wells, shut down, or the production from which was reduced by such temporary order of the Commission, so as to recover or make up the oil such defendant or defendants could have lawfully produced from such well or wells during the period such well or wells were shut down or the production thereof was reduced, if such temporary order of the Commission requiring such well or wells to be shut down, or the production therefrom to be reduced, had not been made by the Commission.

Added by Laws 1933, c. 131, p. 288, § 22, emerg. eff. April 10, 1933.



§52106. Notice on filing of motion or petition.

Upon the filing of any motion or petition for order or orders of enforcement, as provided in the preceding section of this act, the Secretary of the Commission, in the name of the Commission and by him as its Secretary, shall issue a notice to the defendant or defendants named in such motion or petition, which said notice shall be addressed to the defendant or defendants in said petition, and shall state, (a) the filing of such motion or petition; (b) the order or orders, rule or rules, regulation or regulations of the Commission, or the provisions of this act, violations of which are charged therein; (c) the common source of supply in or with respect to which such violation has occurred or is occurring; (d) the date on which said motion or petition is set for hearing, which shall be on such date as shall be provided by order, rule or regulation of the Commission, but shall not be earlier than ten (10) days from the date of the issuance of such notice; and (e) a copy of said motion or petition filed in said cause shall be attached to said notice, and if any temporary order of enforcement shall have been made by the Commission in said proceedings, reference to such order shall be contained in said notice and a copy thereof shall be attached to said notice, in order that service of the same upon the defendant or defendants may be made at the same time as the service of said notice.

Added by Laws 1933, c. 131, p. 290, § 23, emerg. eff. April 10, 1933.



§52107. Process Service How made Return.

Except as otherwise provided or authorized in this act, service of any notice, petition or other pleading, citation, summons, subpoena, order of the Commission of which service is required, and execution, commitment or other process, in any proceeding before the Commission under the provision of this act, may be made by the Proration Umpire, his assistant or any deputy to the Proration Umpire, or by any other person authorized and directed by order of the Commission to make such service, and such service may be made upon any person, firm, trust, association or corporation, required to be served, in the same manner as is provided for the service of summons in civil actions in the district courts of the state, upon such persons, firms, trusts, associations, and corporations respectively. The officer or other person making any such service shall make his return thereof and file the same with the Secretary of the Commission. Said return shall show the time when the notice, pleading, citation, petition, summons, subpoena, order of the Commission, execution, commitment, or other process was received by him and the time and manner the same was served by him.

Added by Laws 1933, c. 131, p. 291, § 24, emerg. eff. April 10, 1933.



§52-108. Oaths - Felony of perjury.

Every person who, having taken an oath that he will testify, declare or depose before the Commission, in any proceeding, or at any hearing before said Commission, authorized and provided for under the provisions of this act, shall willfully and contrary to such oath state any material matter which he knows to be false, is guilty of the felony of perjury, and upon conviction, shall be punished by imprisonment in the State Penitentiary for not more than five (5) years.

Added by Laws 1933, c. 131, p. 291, § 25, emerg. eff. April 10, 1933. Amended by Laws 1997, c. 133, § 490, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 355, eff. July 1, 1999.



NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 490 from July 1, 1998, to July 1, 1999.



§52-109. False verification of documents as perjury - Punishment.

Any person who shall verify under oath any report, map or drawing or other statement or document authorized or required by the provisions of this act, or by any order, rule or regulation of the Commission made under the provisions of this act to be filed with the Commission or with the Secretary of the Commission, or with any other officer, and who files or causes the same to be filed with the Secretary of the Commission or other officer, which states or contains any material matter which he knows to be false is guilty of the felony of perjury, and upon conviction thereof shall be punished by imprisonment in the State Penitentiary for not less than two (2) years, nor more than ten (10) years.

Added by Laws 1933, c. 131, p. 291, § 26, emerg. eff. April 10, 1933. Amended by Laws 1997, c. 133, § 491, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 356, eff. July 1, 1999.



NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 491 from July 1, 1998, to July 1, 1999.



§52110. Market demand Transportation and marketing facilities Evidence Proceedings and hearings.

In any proceeding or at any hearing before the Commission wherein the Commission shall require or shall deem it advisable to ascertain and/or find the reasonable market demand and/or the transportation or marketing facilities for oil that may be produced from any common source of supply during any specific period of time thereafter, it shall be competent, subject to such limitations and conditions, as shall be prescribed and provided by general order or rule of the Commission, to receive in evidence in such proceeding or at such hearing, any statement which shall have been communicated to (a) the Commission, or (b) to the Secretary of the Commission, or (c) to the Proration Umpire, by any purchaser or taker of oil by (a) telegram, or (b) letter, which shall state the amount of oil produced from said common source of supply (a) that such purchaser or taker contemplates or intends he or it will purchase during the period of time involved; or (b) the capacity of his or its transportation or marketing facilities which will be, during the period of time involved, available for transportation and/or marketing oil that may be produced from such common source of supply; and the Commission in ascertaining and determining the transportation or marketing facilities, or the reasonable market demands for oil during any such period of time that may be produced from such common source of supply may give such weight to such evidence that it shall determine the same is entitled.

Added by Laws 1933, c. 131, p. 291, § 27, emerg. eff. April 10, 1933.



§52111. Collateral attack on orders, rules and regulations Appeals Supreme Court.

No collateral attack shall be allowed upon orders, rules and regulations of the Commission made hereunder, but the sole method of reviewing such orders and inquiring into and determining their validity, justness, reasonableness or correctness shall be by appeal from such orders, rules or regulations to the Supreme Court. On appeal every such order, rule or regulation shall be regarded as prima facie, valid, reasonable and just. No court of this state except the Supreme Court, and it only on appeal, as herein provided, shall have jurisdiction to review, reverse, annul, modify or correct any order, rule, or regulation of the Commission within the general scope of its authority herein or to enjoin, restrain or suspend execution or operation thereof, provided that writs of mandamus and prohibition shall lie from the Supreme Court to the Commission in all cases where such writs, respectively, would under like circumstances lie to any inferior court or officer.

Added by Laws 1933, c. 131, p. 292, § 28, emerg. eff. April 10, 1933.

Author:  admin [ Tue Apr 26, 2011 2:57 pm ]
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§52-570.2. Definitions.

As used in the Production Revenue Standards Act:

1. "Owner" means a person or governmental entity with a legal interest in the mineral acreage under a well which entitles that person or entity to oil or gas production or the proceeds or revenues therefrom;

2. "Produce", "Producing" and "Production" mean the physical act of severance of oil and gas from a well by an owner and includes but is not limited to the sale or other disposition thereof;

3. "Producing owner" means an owner entitled to produce who during a given month produces oil or gas for its own account or the account of subsequently created interests as they burden its interest;

4. "Proportionate production interest" means that interest in production which a working interest owner is entitled to produce in order to adjust for shifting of royalty burdens among working interest owners under the royalty payment provisions of this act, and is equal to the quotient of:

a. the sum of that working interest owner's net revenue interests plus the net revenue interests of any subsequently created interests as they burden such owner's working interest,

b. divided by the remainder of one (1) less the royalty share;

5. "Proportionate royalty share" means the percentage of the royalty share owned by a royalty interest owner calculated by dividing such owner's royalty interest in a well by the royalty share;

6. "Royalty interest" means the entirety of the percentage interest in production or proceeds therefrom:

a. reserved or granted by a mineral interest owner exclusive of any interest defined as a working interest or a subsequently created interest, or

b. otherwise provided or ascribed to a mineral interest owner by statute, rule, order or operation of law.

The interest of a participating mineral interest owner shall be designated in part as a royalty interest and in part as a working interest as set forth in Section 87.1 of Title 52 of the Oklahoma Statutes;

7. "Royalty interest in a well" means an owner's royalty interest multiplied by the quotient of:

a. the gross mineral acres under the well attributable to such interest, divided by

b. the total mineral acres under the well;

8. "Royalty proceeds" means the share of proceeds or other revenue derived from or attributable to any production of oil and gas attributable to the royalty share, but shall not include payments of bonus, delay rentals, shut-in royalties or any additional royalty payable to the Commissioners of the Land Office or other governmental entity, pursuant to and valued according to the terms of its oil and gas lease, which is calculated separately from the royalty portion of actual proceeds from the sale of oil or gas;

9. "Royalty share" means the percentage of the well equal to the sum of all royalty interests in a well;

10. "Subsequently created interest" means any interest carved from a working interest other than a royalty interest. In addition to the royalty interest contained in a lease, a nonparticipatory interest created by a working interest owner for the benefit of a mineral interest owner in excess of a one-eighth (1/8) royalty interest may, by separate agreement other than the oil and gas lease, be a subsequently created interest and thereby not be communitized under the terms of the Production Revenue Standards Act only if there is clear and unambiguous language expressing that intent in the creating document. The additional royalty payable to the Commissioners of the Land Office or other governmental entity, pursuant to and valued according to the terms of its oil and gas lease, which is calculated separately from the royalty portion of actual proceeds from the sale of oil or gas shall also be a subsequently created interest and thereby shall not be communitized under the Production Revenue Standards Act;

11. "Well" means an oil or gas well, and shall include:

a. a well having uniform ownership as to all producing zones,

b. a drilling and spacing unit having uniform ownership wherein multiple wells producing gas are commonly metered, and

c. each separately metered producing zone within a single wellbore wherein ownership varies by zone; and

12. "Working interest" means the interest in a well entitling the owner thereof to drill for and produce oil and gas, including but not limited to the interest of a participating mineral owner to the extent set forth in Section 87.1 of Title 52 of the Oklahoma Statutes.

Added by Laws 1992, c. 190, § 2, eff. Sept. 1, 1992.



§52-570.3. Application of act.

The Production Revenue Standards Act shall apply to all owners and shall apply to all producing wells, regardless of the date pooled, drilled or of the date of the underlying leases; provided, however, that Sections 4, 5, 6, 7 and 8 of this act shall not apply to wells in common sources of supply under unitized management pursuant to Section 287.1 of Title 52 of the Oklahoma Statutes or where royalty remittance is otherwise provided by written agreement among all owners in a well.

Added by Laws 1992, c. 190, § 3, eff. Sept. 1, 1992.



§52-570.4. Sharing of and payment of proceeds - Operator's capacity and duties - Alternative royalty disbursement procedure.

A. In each month, each royalty interest owner shall share in all proceeds derived from the sale of gas production from a well to the extent of such owner's royalty interest in that well without regard to the identity of the producing owners during that period.

B. Each producing owner shall pay or cause to be paid to the operator the royalty share of its gas sales proceeds, valued according to such producing owner's lease terms or Corporation Commission forced pooling order, from all gas produced from the well by such owner during any month. The operator shall thereupon pay or cause to be paid such royalty proceeds to each royalty interest owner in the well in accordance with the proportionate royalty share owned by each royalty interest owner. The payment of such proceeds shall be accompanied by the information set out in Section 12 of this act.

C. The operator shall act solely in a ministerial capacity when performing functions on behalf of others pursuant to this act. The operator shall have discharged its duties to pay royalty proceeds under this act when it remits to the royalty interest owner such royalty proceeds that the operator has received from an owner pursuant to this act. In the absence of a division order signed by a royalty interest owner, an operator in distributing or causing to be distributed the royalty proceeds on gas production to that royalty interest owner shall be entitled to rely on royalty ownership and remittance information provided by the working interest owner burdened by such royalty interest. Working interest owners shall be solely liable for mispayments caused by their errors in or omissions of royalty ownership and remittance information on the royalty interests burdening them. When collecting and disbursing royalty funds and reporting pursuant to Section 12 of this act, the operator shall be entitled to rely on information provided to it by or on behalf of another producing owner.

D. As an alternative to the royalty disbursement procedure set forth in subsection B of this section, a producing owner shall have the right to pay or cause to be paid the royalty share of its gas sales from gas produced by such owner during any month directly to all royalty interest owners according to their proportionate royalty shares in such well, contingent upon the following:

1. Such producing owner shall be solely liable for all errors in and omissions of payment that it makes of royalty proceeds;

2. Such producing owner shall make written report to the operator within thirty (30) days of the date of such payment of all information relating to such payments, including the information specified by Section 12 of this act;

3. Such producing owner shall give to the operator not less than sixty (60) days' written notice prior to initiating or terminating this alternate royalty disbursement procedure; provided, however, any owner terminating this alternate royalty disbursement procedure may not reinitiate such procedure for twelve (12) months from the effective date of such termination;

4. Such producing owner shall solely bear all additional costs incurred by the operator or itself because of its initiation, utilization or termination of this alternative royalty payment procedure; and

5. Such producing owner shall provide or cause to be provided to the royalty interest owners for each month such producing owner's proportionate production interest, and the information required under Section 12 of this act.

Added by Laws 1992, c. 190, § 4, eff. July 1, 1993.



§52-570.5. Designation of person for certain royalty, accounting and remittance functions.

A. The owners owning a majority in interest of the working interest in a well or the Corporation Commission for cause upon proper application by any working interest owner and notice to all working interest owners in a well may designate a person other than the operator, which person is defined for purposes of this section to include, but not be limited to, a bank or a trust company, to perform the royalty accounting and remittance functions assigned to the operator pursuant to the Production Revenue Standards Act, upon consent to and assumption by that person of:

1. Any costs thereby incurred; and

2. An obligation to furnish to the operator such information necessary to the operator for the discharge of its duties.

B. Any person designated pursuant to this section shall assume all rights and duties of and shall be held to the same standards of care as the operator as set forth in this section and Sections 4, 6, 7 and 13 and subsections A and G of Section 8 and subsections C and E of Section 10 of this act. Any person designated pursuant to this section who is not a working interest owner in the well, a first purchaser of production from the well or a bank or trust company shall be bonded or post other surety in an amount equal to Fifty Thousand Dollars ($50,000.00). Except as provided by private agreement or Corporation Commission order derived from other statutory authority, such person shall not thereby assume other rights or duties of the operator.

Added by Laws 1992, c. 190, § 5, eff. July 1, 1993.



§52-570.6. Selling royalty gas in kind - Consumption and accounting for royalty gas.

A. A royalty interest owner who has a right to sell royalty gas in kind may do so as described in the agreement creating such right, but in no event upon less than sixty (60) days' prior written notice to its lessee or lessees and the operator. Solely for purposes of revenue allocation under the Production Revenue Standards Act, the interest of a royalty interest owner selling gas and the working interest burdened thereby shall each be regarded as part royalty interest and part working interest, in the same percentages that the royalty and working interests are provided in the lease. A royalty interest owner selling gas shall remit the royalty share of its gas sales to the operator in the same manner as any other producing owner.

B. If metered, consumption of gas from a well by a royalty interest owner or surface owner wherein there is no sale of such gas shall be deemed production by the working interest owner burdened by the contractual right to consume gas and shall be accounted for at the average price, weighted by volume, of gas from that well sold by such working interest owner during that month. In the absence of a sale by such working interest owner, the average price, weighted by volume, of gas from that well sold by all producing owners during that month, shall be used.

C. A burdened working interest owner and the operator shall have the right to accomplish the accounting required pursuant to this section by offset or adjustment.

D. Royalty gas taken in kind by the Commissioners of the Land Office shall be considered consumption of gas from a well by a royalty interest owner and shall be deemed production by the working interest owner burdened by the contractual right of the Commissioners of the Land Office to take such gas in kind. Such gas shall be accounted for by the working interest owner so burdened at the average price, weighted by volume, of gas from that well sold by such working interest owner during that month. In the absence of a sale by such working interest owner, the average price, weighted by volume, of gas from that well sold by all producing owners during that month shall be used. The Commissioners of the Land Office shall account to such working interest owner for such royalty gas taken in kind at the average price, weighted by volume, of gas from that well sold by all producing owners during that month.

Added by Laws 1992, c. 190, § 6, eff. July 1, 1993.



§52-570.7. Out-of-balance wells.

A. For purposes of the Production Revenue Standards Act a well is out of balance when cumulative gas sales on a volumetric basis for the account of all owners in a well have not been made in proportion to the respective net revenue interest of each owner.

B. In a well wherein the cumulative gas production accounts of royalty interest owners are out of balance, producing owners in that well may agree to have the distribution of gas royalty proceeds among the royalty interest owners made in a manner other than according to their proportionate royalty shares, provided that:

1. Such variance shall only be permitted to the extent required to balance the cumulative gas production accounts of the royalty interest owners; and

2. Prior notice thereof is given to the royalty interest owners affected thereby, and to the operator along with any ongoing information necessary for the operator to discharge its duties.

C. Nothing in this section shall be construed to impair any rights to balancing which may exist by contract or law.

Added by Laws 1992, c. 190, § 7, eff. July 1, 1993.



§52-570.8. Working interest owner's statement to operator - Nomination of gas for producing owner's account - Producing owner's report - Gas meter owner's statement - First purchaser's or shipper's statement - Records to be maintained - Operator's rights and remedies for noncompliance - Elections and notices - Other remedies.

A. Within sixty (60) days after receiving a written request from the operator, each working interest owner in a well producing gas shall furnish or cause to be furnished to the operator a written statement showing the name, address, royalty interest, taxpayer identification number and payment status of owners of royalty interest to which such working interest is subject. Thereafter, each working interest owner shall furnish or cause to be furnished to the operator a written statement showing:

1. Changes in the above specified information within sixty (60) days of receipt of notification thereof; or

2. Changes in its working interests within sixty (60) days of the receipt of notice of the change.

B. Each producing owner of gas from a well shall provide to the operator no later than five (5) business days prior to the month in which the nomination is to be effective, but earlier if required by the first purchaser or transporter, the name of the first purchaser or shipper and the volumes of gas nominated for production for such producing owner's account. The term "shipper", as used in this section, shall include any entity who contracts with a transporter to move gas through the transporter's system. The owner of the gas meter shall confirm all nominations with the operator of the well no later than the last business day prior to the month in which production occurs.

C. Within sixty (60) days after the end of the month of production, each producing owner shall report and account to the operator of the well, the identity of the first purchaser or shipper of the gas and the information specified in Section 570.12 of this title. Within thirty (30) days after receiving notice of any retroactive gas volume adjustment, each producing owner shall furnish, or cause to be furnished, notice of such retroactive adjustment to the operator of the well.

D. Within fifteen (15) days after the end of the month of production, each owner of a gas meter taking gas solely from a gathering system shall provide upon first request by the owner of such gathering system and thereafter, the gross volume of gas measured by such meter both in MCF and British Thermal Unit equivalent.

Within twenty (20) days after the end of the month of production, each owner of a gas meter shall provide or cause to be provided in writing to the operator of the well, the gross volume of gas measured by such meter, both in MCF and British Thermal Unit equivalent, and the volume of gas allocated at the meter to each first purchaser or shipper and each contracted producing owner that sold gas to the owner of the gas meter. Each meter owner shall, within the same time period, furnish each first purchaser or shipper the volume of gas allocated at the meter to that first purchaser or shipper. However, in the event a gas processing plant operator is performing the allocations, within ten (10) days after the end of the production month, the pipeline residue gas meter owner shall provide, upon first request by the processing plant operator and thereafter, the volume and British Thermal Unit equivalent measured through its meter as required by the gas processing plant operator for its allocations under this subsection.

The owner of a gas meter who has a gas contract, whether one or more, with one or more producing owners covering all of the gas flowing through its gas meter, may, as an alternative to supplying the operator with the information stated in this subsection, furnish monthly volume statements to the operator of the well, provided it has already furnished the operator with the names of the producing owners and the decimal interest owned by each such producing owner or any method other than by decimal interest then in effect for allocating gas among the producing owners. Thereafter, the owner of the gas meter shall only be required to supply the operator with changes to the name of a producing owner, the decimal interest owned by a producing owner or the method, other than by decimal interest, for allocating gas among the producing owners within thirty (30) days after receiving notice of such change.

Within thirty (30) days after receiving notice of any retroactive gas volume adjustment, each owner of a gas meter shall furnish notice of such retroactive adjustment to the operator of the well.

E. Within thirty-five (35) days after the end of the month of production each first purchaser or shipper of gas from a gas meter shall furnish or cause to be furnished to the operator of the well, a volume allocation statement showing the volume of gas purchased from or shipped for each contracted producing owner. Within thirty (30) days after making any retroactive gas volume adjustment for such well, the first purchaser or shipper shall furnish notice of such retroactive gas volume adjustment to the operator of the well.

F. Any owner of a gas meter, first purchaser, or any gas shipper that does not provide the information required under subsection D or E of this section shall subject the producing owner or owners contracted to such entity to the same remedies available to the operator under subsection H of this section, as if such producing owner or owners are in noncompliance with subsections A and C of this section.

G. For production occurring after August 31, 1992, each person distributing proceeds to a royalty interest owner shall maintain for a period of not less than five (5) years:

1. Copies of information furnished to the operator pursuant to the Production Revenue Standards Act; and

2. A record of receipts and payments of proceeds which have occurred pursuant to the Production Revenue Standards Act.

Such records shall be available for inspection upon reasonable notice by any affected royalty interest owner in the well.

H. The Production Revenue Standards Act shall not supersede or limit the operator's right to control gas nominations and allocations pursuant to the provisions of any joint operating agreement, gas balancing agreement or other agreement then in effect between the operator of the well and any producing owner, or any order of the Oklahoma Corporation Commission. If the operator of the well is not provided with the information set forth in subsections A and C of this section within the sixty-day period set forth in each said subsection, the operator of the well shall have the right, but not the obligation, to confirm zero volume of gas sales for such noncomplying producing owner and to make available for nomination and sale to the producing owners in the well then in compliance with the provisions of subsections A and C of this section, all of the noncomplying producing owner's share of production for the next subsequent calendar month of production and for each and every month thereafter during which such producing owner is in noncompliance with provisions of subsections A and C of this section. If the operator elects to make the noncomplying producing owner's share of production available for nomination and sale, the operator shall immediately notify the noncomplying producing owner, by certified mail, that it shall no longer have the right to nominate any volume of gas until it is in compliance with the provisions of subsections A and C of this section, or its first purchaser, shipper or owner of the gas meter are in compliance with subsections D and E of this section. Such notice shall contain the following information:

1. Lease or well identification;

2. Legal location; and

3. Production months of noncompliance with subsections A, C, D or E of this section.

The operator shall then immediately notify each producing owner then in compliance with subsections A and C of this section that additional gas may be available for nomination and sale. The operator shall also immediately notify in writing the noncomplying producing owner's first purchaser or shipper and the owner of the gas meter that the producing owner, first purchaser, shipper or owner of the gas meter is in noncompliance with the provisions of subsections A, C, D or E of this section and thus does not have the right to nominate and sell or transport any volume of gas until it is in compliance with this section.

The first purchaser or shipper and the owner of the gas meter shall be entitled to rely on and shall incorporate on a prospective basis any nomination or allocation changes pursuant to such notification from the operator under this section. Changes pursuant to such notification can be made on a retroactive basis if so agreed to by the operator, owner of the meter, and first purchaser or shipper.

As soon as a noncomplying party is in compliance with the provisions of this section, but no sooner than the next production month unless otherwise agreed to, the operator of the well shall give the affected producing owner the opportunity to nominate and sell gas subject to existing agreements or by common practice within the oil and gas industry.

Any noncomplying party that disagrees with the information contained in the operator's written notice required under this subsection shall have the right to challenge the operator's actions pursuant to the provisions of subsection J of this section.

I. All elections and notices given pursuant to the provisions of the Production Revenue Standards Act shall become effective as of the first day of the month following the end of any time period specified in the Production Revenue Standards Act.

J. The remedies provided for in this section shall not preclude any party from pursuing the remedies available to it through the district courts, as provided by existing law, including the right to offset.

K. Nothing contained in the Natural Gas Market Sharing Act shall change the obligations of a purchaser under an existing gas contract unless otherwise agreed to by the parties.

Added by Laws 1992, c. 190, § 8, eff. Sept. 1, 1992. Amended by Laws 1993, c. 340, § 2, emerg. eff. June 9, 1993.



§52-570.9. Production rights of owner - Ownership and payment of proceeds - Working interest owner's rights, duties and liability - Effect of act.

A. Each owner entitled to produce shall at a minimum have the right to produce separately its proportionate production interest in monthly production, subject to balancing restrictions created by statute, rule, agreement or operation of law; provided, however, no provision of the Production Revenue Standards Act shall create a new right for any owner to produce in excess of its proportionate production interest share of the total recoverable reserves from a well. As used herein, an owner is entitled to produce when by right of contract, lease, mineral ownership, Corporation Commission order or operation of law, such owner has acquired or retained a current right to separately contract for, dispose of or sell oil or gas from a well. Nothing in the Production Revenue Standards Act shall prevent any owner having the right to take production in kind, including a royalty interest owner, from so taking its share of production in kind or create a right to take in kind or use production, which right did not previously exist.

B. Except as otherwise provided by statute, rule, agreement or operation of law, proceeds from production, after deduction of royalty proceeds, shall be separately owned by the producing owner and any subsequently created interests attributable to the interests of such owner. A working interest owner shall be responsible for payment and reporting to any subsequently created interest which burdens its working interest.

C. All rights, burdens, duties and undertakings attributable to working interest other than the duty to pay royalty proceeds shall remain with such working interest and shall not be communitized pursuant to the Production Revenue Standards Act.

D. Notwithstanding any other provisions of the Production Revenue Standards Act, any working interest owner that pays or causes to be paid royalty proceeds for gas production in accordance with the Production Revenue Standards Act valued according to the terms of such working interest owner's lease shall be relieved from all liability to royalty interest owners for any further payment of proceeds from such production.

E. Nothing in the Production Revenue Standards Act shall:

1. Prevent any working interest owner entitled to produce gas from receiving the price agreed upon by contract;

2. Eliminate or otherwise affect the rights and remedies available to any operator or working interest owner against any other working interest owner, including but not limited to an operator, that defaults or fails to pay its proportionate share of the well cost; or

3. Set the price, terms or conditions under which a purchaser takes the production or set any restrictions, limitations, floor or ceiling on the price to be paid for such production.

Added by Laws 1992, c. 190, § 9, eff. July 1, 1993.



§52-570.10. Payment of proceeds from sale of oil and gas production.

A. All proceeds from the sale of production shall be regarded as separate and distinct from all other funds of any person receiving or holding the same until such time as such proceeds are paid to the owners legally entitled thereto. Any person holding revenue or proceeds from the sale of production shall hold such revenue or proceeds for the benefit of the owners legally entitled thereto. Nothing in this subsection shall create an express trust.

B. Except as otherwise provided in this section:

1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:

a. commencing not later than six (6) months after the date of first sale, and

b. thereafter not later than the last day of the second succeeding month after the end of the month within which such production is sold.

2. Notwithstanding paragraph 1 above, royalty proceeds from the sale of gas production from an oil or gas well remitted to the operator pursuant to subsection B of Section 570.4 of this title shall be paid to persons legally entitled thereto:

a. commencing not later than six (6) months after the date of first sale, and

b. thereafter not later than the last day of the third succeeding month after the end of the month within which such production is sold; provided, however, when proceeds are received by the operator in its capacity as a producing owner, the operator may pay the royalty share of such proceeds to the royalty interest owners legally entitled thereto at the same time that it pays the royalty proceeds received from other producing owners for the same production month, but not later than the last day of the third succeeding month after the end of the month within which such production was sold.

3. a. Proceeds from production may be remitted to the persons entitled to such proceeds annually for the twelve (12) months accumulation of proceeds totaling at least Ten Dollars ($10.00) but less than One Hundred Dollars ($100.00). Amounts less than Ten Dollars ($10.00) may be held but shall be remitted when production ceases or by the payor upon relinquishment of payment responsibility.

b. Proceeds totaling less than One Hundred Dollars ($100.00) but more than Twenty-five Dollars ($25.00) shall be remitted monthly if requested by the person entitled to the proceeds. Amounts less than Ten Dollars ($10.00) shall be remitted annually if requested by the person entitled to the proceeds.

c. Before proceeds greater than Twenty-five Dollars ($25.00) may be accumulated, payor shall provide notice to the person owning interest as defined in Section 570.2 of this title, entitled to such proceeds that there is an option to be paid monthly for proceeds greater than Twenty-five Dollars ($25.00). Such notice to the person shall also provide directions for requesting monthly payment, and constitutes notice to all heirs, successors, representatives, and assigns of the person.

4. Any delay in determining the persons legally entitled to proceeds from production caused by unmarketable title shall not affect payments to persons whose title is marketable.

C. 1. A first purchaser that pays or causes to be paid proceeds from production to the producing owner of such production or, at the direction of the producing owner, pays or causes to be paid royalty proceeds from production to:

a. the royalty interest owners legally entitled thereto, or

b. the operator of the well,

shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.

2. A working interest owner that pays or causes to be paid royalty proceeds from production to:

a. the royalty interest owners legally entitled thereto, or

b. the operator of the well,

shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.

3. An operator that pays or causes to be paid royalty proceeds from production, received by it as operator, to the royalty interest owners legally entitled thereto shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.

4. Where royalty proceeds are paid incorrectly as a result of an error or omission, the party whose error or omission caused the incorrect royalty payments shall be liable for the additional royalty proceeds on such production and all resulting costs or damages incurred by the party making the incorrect payment.

D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.

2. a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.

b. Where marketability has remained uncured for a period of one hundred twenty (120) days from the date payment is due under this section, any person claiming to own the right to receive proceeds which have not been paid because of unmarketable title may require the holder of such proceeds to interplead the proceeds and all accrued interest into court for a determination of the persons legally entitled thereto. Upon payment into court the holder of such proceeds shall be relieved of any further liability for the proper payment of such proceeds and interest thereon.

E. 1. Except as provided in paragraph 2 of this subsection, a first purchaser or holder of proceeds who fails to remit proceeds from the sale of oil or gas production to owners legally entitled thereto within the time limitations set forth in paragraph 1 of subsection B of this section shall be liable to such owners for interest as provided in subsection D of this section on that portion of the proceeds not timely paid. When two or more persons fail to remit within such time limitations, liability for such interest shall be shared by those persons holding said proceeds in proportion to the time each person held such proceeds.

2. When royalty proceeds on gas production are remitted pursuant to subsection B of Section 570.4 of this title:

a. A first purchaser that causes such proceeds to be received by the operator or by a producing owner in the well for distribution to the royalty interest owner legally entitled thereto within the first month following the month in which such production was sold shall not be liable for interest on such proceeds.

b. A producing owner receiving royalty proceeds that causes such proceeds to be received by the royalty interest owner legally entitled thereto or by the operator for distribution to the royalty interest owner legally entitled thereto not later than the end of the first month following the month in which proceeds for such production was received by the producing owner from the purchaser shall not be liable for interest on such proceeds.

c. An operator receiving royalty proceeds that causes such proceeds to be received by the royalty interest owner legally entitled thereto, not later than the end of the first month following the month in which proceeds for such production was received by the operator from the purchaser or producing owner shall not be liable for interest on such proceeds.

d. Liability for interest provided in subsection D of this section shall be borne solely by the person, or persons, failing to remit royalty proceeds within the time limitations set forth in subsection B of this section. When two or more persons fail to remit within such time limitations, liability for such interest shall be shared by such persons in proportion to the time each person held such proceeds.

F. Nothing in this section shall be construed to impair or amend existing or future contractual rights provided for in gas balancing agreements or other written agreements which expressly provide for the taking, sharing, marketing or balancing of gas or the proceeds therefrom. Any proceeds to be paid pursuant to any such agreement shall not commence to earn interest until the sooner of the time provided in such agreement for the payment of such proceeds or ninety (90) days from the date of the depletion of the well. Nothing herein shall be deemed to alter or limit the payment of royalty proceeds as provided in the Production Revenue Standards Act.

Added by Laws 1980, c. 205, § 1, eff. July 1, 1980. Amended by Laws 1985, c. 141, § 1; Laws 1989, c. 241, § 1, eff. July 1, 1989; Laws 1992, c. 190, § 10, eff. July 1, 1993. Renumbered from § 540 of this title by Laws 1992, c. 190, § 28. Amended by Laws 1993, c. 337, § 2, eff. July 1, 1993; Laws 1995, c. 146, § 1, eff. July 1, 1995.



§52-570.11. Division orders.

A division order is an instrument for the purpose of directing the distribution of proceeds from the sale of oil, gas, casinghead gas or other related hydrocarbons which warrants in writing the division of interest and the name, address and tax identification number of each interest owner with a provision requiring notice of change of ownership. A division order is executed to enable the first purchaser of the production or holder of proceeds to make remittance of proceeds directly to the owners legally entitled thereto and does not relieve the lessee of any liabilities or obligations under the oil and gas lease. Terms of a division order which conflict with the terms of any oil and gas lease are invalid, unless previously agreed to by the affected parties. This subsection shall only apply to division orders executed on or after July 1, 1989.

Added by Laws 1992, c. 190, § 11, eff. Sept. 1, 1992.



§52-570.12. Information to be included with payments to interest owner - Calculation of revenue decimals - Measurement of gas volume reported.

A. The following information for each property and month of sale shall be included with each payment made to an interest owner from the sale of oil or gas:

1. Lease or well identification;

2. Month and year of sales included in the payment;

3. Total barrels or MCF attributed to such payment;

4. Price per barrel or MCF, including British Thermal Unit adjustment of gas sold;

5. Total amount attributed to such payment of severance and other production taxes, with the exception of windfall profit tax;

6. Net value of total sales attributed to such payment after taxes are deducted;

7. Owner's interest, expressed as a decimal, in production from the property;

8. Owner's share of the total value of sales attributed to such payment prior to any deductions;

9. Owner's share of the sales value attributed to such payment less owner's share of the production and severance taxes; and

10. A specific listing of the amount and purpose of any other deductions from the proceeds attributed to such payment due to the owner upon request by the owner.

B. For purposes of the Production Revenue Standards Act:

1. All revenue decimals shall be calculated to not less than the nearest sixth decimal place, which is the nearest part in one million; and

2. Gas volumes reported to any owner shall be measured as required by Section 474 of Title 52 of the Oklahoma Statutes.

Added by Laws 1992, c. 190, § 12, eff. Sept. 1, 1992.



§52-570.13. Promulgation of rules.

The Corporation Commission shall promulgate rules, as needed, in furtherance of the purposes of the Production Revenue Standards Act, including but not limited to a schedule of equitable fees and expense reimbursements from working interest owners sufficient to cover the actual costs incurred by the operator to perform duties required by the Production Revenue Standards Act not assumed by private agreement.

Added by Laws 1992, c. 190, § 13, eff. Sept. 1, 1992.



§52-570.14. Jurisdiction of district courts - Rulemaking power of Corporation Commission - Right of action of injured owner and costs of suit - Statute of limitations.

A. The district courts within this state shall have the sole and exclusive jurisdiction to determine the entitlement of any owner in a well to:

1. Its share of proceeds from production; or

2. Damages, interest, court costs, attorneys' fees or allowable litigation expenses incurred as a result of the violation of this act.

B. Any rulemaking power granted to the Corporation Commission by the Production Revenue Standards Act shall neither preclude nor impair the right of any owner to obtain through the district courts remedies available under existing law or additional remedies herein granted to any owner injured in business or property by reason of any action in violation of the provisions of the Production Revenue Standards Act.

C. Any owner injured in business or property by reason of any action in violation of the provisions of the Production Revenue Standards Act shall have the right to:

1. Recover actual damages so sustained; and

2. Obtain specific performance where equitable.

The prevailing party in any court proceeding brought pursuant to the Production Revenue Standards Act shall be entitled to recover the costs of the suit, including but not limited to reasonable attorney and expert witness fees.

D. For purposes of the Production Revenue Standards Act, the statute of limitations on actions brought pursuant to the provisions of the Production Revenue Standards Act shall be five (5) years from the date the cause of action shall have accrued, provided however, nothing shall create, limit or expand any statute of limitations applicable to production occurring prior to September 1, 1992.

Added by Laws 1992, c. 190, § 14, eff. Sept. 1, 1992.

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