Section 259.110

Title XVI CONSERVATION, RESOURCES AND DEVELOPMENT

Chapter 259

Effective - 28 Aug 1965   

  259.110.  Production pooling authorized. — 1.  When two or more separately owned tracts are embraced within a spacing unit, or when there are separately owned interests in all or a part of the spacing unit, then the owners and royalty owners thereof may pool their interests for the development and operation of the spacing unit.  In the absence of voluntary pooling the council, upon the application of any interested person, shall enter an order pooling all interests in the spacing unit for the development and operations thereof.  Each such pooling order shall be made after notice and hearing, and shall be upon terms and conditions that are just and reasonable, and that afford to the owner of each tract or interest in the spacing unit the opportunity to recover or receive, without unnecessary expense, his just and equitable share.  Operations incident to the drilling of a well upon any portion of a spacing unit covered by a pooling order shall be deemed for all purposes the conduct of such operations upon each separately owned tract in the drilling unit by the several owners thereof.  That portion of the production allocated to each tract included in a spacing unit covered by a pooling order shall, when produced, be deemed for all purposes to have been produced from such tract by a well drilled thereon.

  2.  Each pooling order shall make provision for the drilling and operation of a well on the spacing unit, and for the payment of the reasonable actual cost thereof by the owners of interests in the spacing unit, plus a reasonable charge for supervision.  In the event of any dispute as to such costs the council shall determine the proper costs.  If one or more of the owners shall drill and operate, or pay the expenses of drilling and operating the well for the benefit of others, then the owner or owners so drilling or operating shall, upon complying with the terms of section 259.130, have a lien on the share of production from the spacing unit accruing to the interest of each of the other owners for the payment of his proportionate share of such expenses.  All the oil and gas subject to the lien shall be marketed and sold and the proceeds applied in payment of the expenses secured by such lien as provided for in section 259.100.

­­--------

(L. 1965 2d Ex. Sess. p. 917 § 11)