Okla. Stat. tit. 52, § 52-581.5: Election to market share - Procedure

A. For wells producing natural gas or casinghead gas, any owner

not having a gas sales contract shall be entitled to elect to share

in the sale of production, to the extent set forth in the Natural

Gas Market Sharing Act.

An electing owner shall give written notice of his election to

the designated marketer. An election shall constitute a warranty

that gas production attributable to such electing owner's interest

is not covered by an existing gas purchase contract, and an

indemnification of any designated marketer sharing market with such

electing owner from losses arising from breach of such warranty.

Market sharing shall become effective as to sales commencing on the

first day of the month following the expiration of sixty (60) days

from receipt of such election by the designated marketer.

Termination of a market sharing shall become effective on the first

day of the month following expiration of sixty (60) days from

receipt of written notice of said termination by the designated

marketer. Copies of all elections and notices required shall also

be sent to the operator if the operator is not the designated

marketer.

B. The operator shall serve as designated marketer until such

time as a substituted designated marketer is elected by a numerical

majority of the eligible electing owners. No election of a

substituted designated marketer shall occur within twelve (12)

months of the prior election.

C. Upon receipt of the notice of election to market share, the

designated marketer shall secure an independent nonaffiliated

purchaser for gas production of such electing owner or shall produce

and sell for the account of such electing owner gas attributable to

the working interest of such electing owner and account to such

electing owner at the same average price, weighted by volume,

received by the designated marketer for all of its nonexempt gas

sales from that well during each month, net of all reasonable

marketing and post-production costs and expenses required to render

the gas marketable and to sell and deliver the gas to market. The

volumetric allocation of sales between a designated marketer and an

electing owner shall be in proportion to their respective working

interests in such well.

D. If all of a designated marketer's sales of gas are exempt,

it may so notify the electing owners and the operator in writing

whereupon the electing owners shall select another designated

marketer pursuant to subsection B of this section by written notice

thereof to the operator and the new designated marketer.

E. If the gas sales of the designated marketer are subject to a

contract of a duration in excess of one (1) year, the designated

marketer may require such electing owners' written agreement to be

bound by the terms of such contract. If the contract does not

contain a confidentiality provision preventing the furnishing of a

copy to the electing owners, the designated marketer shall then

furnish them a copy of the gas sales contract, and upon receipt of a

copy of such contract and notice setting forth the provisions of

this section, each electing owner shall have thirty (30) days within

which in writing to either:

1. Elect a new designated marketer pursuant to subsection B of

this section, notwithstanding the twelve-month limitation contained

therein;

2. Agree to be bound by the terms of such contract; or

3. Terminate market sharing.

Failure by any electing owner to return such written agreement shall

be deemed an election to not market share and shall relieve that

producing owner of any further obligation to market share or

otherwise secure a market for such electing owner's share of

production under this section for the duration of that contract.

F. Any administration fees established by the Corporation

Commission which are payable to a designated marketer by an electing

agreement shall

be deemed an election to not market share and shall relieve that

producing owner of any further obligation to market share or

otherwise secure a market for such electing owner's share of

production under this section for the duration of that contract.

F. Any administration fees established by the Corporation

Commission which are payable to a designated marketer by an electing

owner who has elected to market share may be deducted from proceeds.

G. The election to market share under the provisions of the

Natural Gas Market Sharing Act shall not result in the electing

owner becoming a party to any contract under which the electing

owner's gas is marketed, and neither the electing owner nor any

person owning a royalty or other non-cost-bearing interest burdening

the interest of the electing owner shall acquire any third-party

beneficiary rights in such contract. Further, the election to

market share under the Natural Gas Market Sharing Act shall not

result in the designated marketer having any fiduciary or other

duties to the electing owner, or to any persons having a royalty or

other nonoperating interest burdening the interest of the electing

owner with respect to the marketing of the electing owner's gas

except those expressly provided in the Natural Gas Market Sharing

Act. In no event shall any designated marketer be liable to any

electing owner for any losses sustained or liabilities incurred in

the absence of bad faith, gross negligence or willful misconduct.

H. If by statute an owner's percentage entitlement to produce

and market gas in a well is other than its working interest

percentage, such percentage calculated pursuant to statute shall be

utilized in lieu of the working interest percentage for purposes of

the Natural Gas Market Sharing Act.