55-1306. Unit operations.
55-1306
55-1306. Unit operations.All operations, including, but not limited to, the commencement,drilling, or operation of a well upon any part of the unit area shall bedeemed for all purposes the conduct of such operations upon each separatelyowned tract in the unit area by the several owners thereof. The portion ofthe unit production allocated to a separately owned tract in a unit areashall, when produced, be deemed, for all purposes, to have been actuallyproduced from such tract by a well drilled thereon. Operations conductedpursuant to an order of the commission providing for unit operations shallconstitute a fulfillment of all the express or implied obligations of eachlease or contract covering lands in the unit area to the extent thatcompliance with such obligations cannot be had because of the order of thecommission.
The portion of the unit production allocated to any tract, and theproceeds from the sale thereof, shall be the property and income of theseveral persons to whom, or to whose credit, the same are allocated orpayable under the order providing for unit operations.
No division order or other contract relating to the sale or purchase ofproduction from a separately owned tract shall be terminated by the orderproviding for unit operations, but shall remain in force and apply to oiland gas allocated to such tract until terminated in accordance with theprovisions of such division order or contract.
Except to the extent that the parties affected so agree no orderproviding for unit operations shall be construed to result in a transfer ofall or any part of the title of any person to the oil and gas rights in anytract in the unit area. All property, whether real or personal, that may beacquired in the conduct of unit operations hereunder shall be acquired forthe account of the working interest owners within the unit area, and shallbe the property of such owners in the proportion that the expenses of unitoperations are charged.
The obligation or liability of each working interest owner, bothnonoperator and operator, in the several separately owned tracts in theunit for the payment of unit expense at all times shall be several and notjoint or collective, and a working interest owner of the oil or gas rightsin the separately owned tract shall not be chargeable with, obligated orliable, directly or indirectly, for more than the amount apportioned,assessed or otherwise charged to his or her interest in the separately ownedtract pursuant to the order of unitization.
History: L. 1967, ch. 299, § 6; July 1.