KRS 353.650: Exclusion of royalty interest in computing share of production --

Limitation.

(1) If one (1) or more of the owners of any operating interest in any portion of the

pooled tract shall drill, deepen or reopen and operate, or pay the costs of drilling,

deepening or reopening and operating a well for the benefit of another owner of an

opening interest, as provided in the pooling order, then such owner or owners shall

be entitled to the proceeds from the share of production from the tracts or portions

thereof pooled accruing to the interest of such other owner, exclusive of any royalty

reserved in any lease or leases of such tracts or portions thereof or exclusive of one -

eighth (1/8) of production attributable to all unleased tracts or portions thereof, until

such proceeds equal the sums payable by or charged to the interest of the other

owner plus a reasonable charge for interest on such sums.

(2) If a dispute shall arise as to the costs of drilling, deepening or reopening, and

operating a well, the director of the Division of Oil and Gas shall determine and

apportion the costs.