75-58-11 - Duties, responsibilities, etc. of operators and non-operators; relationship between operators and non-operators.
§ 75-58-11. Duties, responsibilities, etc. of operators and non-operators; relationship between operators and non-operators.
(a) Each consenting non-operator shall be responsible for and shall pay to the operator that consenting non-operator's share of direct and actual marketing expenses relating to the marketing of consenting non-operator's gas, including, but not limited to, capital expenses, third-party transportation costs, pipeline penalties, fines, refunds, reimbursements, adjustments, direct costs, and contractual liabilities to third parties. Consenting non-operators shall not be liable for damages resulting from operator's gross negligence or willful misconduct in fulfilling operator's obligations under this chapter. Nothing in this chapter shall be construed so as to impose any liability upon consenting non-operators except as provided by this chapter. In addition, each consenting non-operator shall pay to operator a marketing fee in an amount equal to two and one-half percent (2-1/2%) of consenting non-operator's monthly net proceeds; provided, however, the sum of all marketing fees received by operator from all consenting non-operators in a well shall not exceed Five Hundred Dollars ($500.00) per month, per well, as adjusted for inflation as herein provided. If the sum of the marketing fee, when based upon the above percentage of net proceeds, would exceed the limitation herein provided, as adjusted for inflation, then each consenting non-operator's marketing fee shall be determined by dividing its percentage ownership in the well by the total percentage ownership of all consenting non-operators in that well, and multiplying the resultant number by the currently effective well limitation. The well limitation of Five Hundred Dollars ($500.00) per month, per well shall be effective through January 31, 1993. On February 1, 1993, and each February 1 thereafter, the well limitation shall be adjusted for inflation by dividing the Consumer Price Index for All Urban Consumers (as published by the United States Department of Labor) for the prior calendar year by the same Consumer Price Index for calendar year 1991, and multiplying the resultant number by Five Hundred Dollars ($500.00). This calculation shall be performed and results published by the Mississippi Oil and Gas Board. At the election of operator, operator may deduct the marketing fees prior to paying the net proceeds to the consenting non-operators, or operator may submit invoices to the consenting non-operators for the marketing fees.
(b) If the operator has obtained a transportation contract with a third party prior to the date on which the application to drill is filed with the board and said contract contains a capacity or volume limitation, then the operator has the option of (1) having the consenting non-operator participate in this preexisting transportation contract (however, if the preexisting transportation contract contains a discount to the operator which is not generally available, then the operator may charge the consenting non-operator the undiscounted transportation tariff applicable to the transaction) or (2) make a good faith effort to secure a separate transportation contract for consenting non-operator's share of gas. If the operator has obtained a transportation contract with a third party prior to the date on which the application to drill is filed and said contract contains a provision which prevents operator from shipping consenting non-operator's gas under that transportation contract, then operator shall make a good faith effort to secure a separate transportation contract for consenting non-operator's share of gas. If the operator secures a separate transportation contract for consenting non-operator's share of gas, then consenting non-operator shall be liable to the operator for the actual cost of securing the separate transportation contract.
(c) This chapter shall not be construed as imposing fiduciary duties upon an operator marketing the gas of a consenting non-operator or creating a fiduciary relationship between the operator and a consenting non-operator.
(d) An operator shall in no event be held liable to any non-operator for any liability, damage, loss, cost or expense relating to the marketing of gas resulting from or arising out of any act or omission of the operator when the operator is acting in compliance with the terms and conditions of this chapter, except in the case of fraud, gross negligence or willful misconduct on the part of operator.
(e) Any sums due under this chapter from consenting non-operators to operator shall be paid to operator within thirty (30) days after receipt of demand from operator. In addition to the rights of the operator to collect all sums due, the operator has the right to deduct from the net proceeds received for any consenting non-operator's share of gas produced from a well, any amount owed with respect to that well by that consenting non-operator by virtue of this chapter.
Sources: Laws, 1991, ch. 490, § 6, eff from and after July 1, 1991.