{"data":{"id":"us-ok/okla.-stat.-tit.-52-52-287.4","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 52, § 52-287.4","heading":"Order - Units and unit areas - Plan of unitization","body":"The order of the Commission shall define the area of the common\n\nsource of supply or portion thereof to be included within the unit\n\narea and prescribe with reasonable detail the plan of unitization\n\napplicable thereto.\n\nEach unit and unit area shall be limited to all or a portion of\n\na single common source of supply. Only so much of a common source\n\nof supply as has been defined and determined to be productive of oil\n\nand gas by actual drilling operations may be so included within the\n\nunit area.\n\nA unit may be created to embrace less than the whole of a common\n\nsource of supply only where it is shown by the evidence that the\n\narea to be so included within the unit area is of such size and\n\nshape as may be reasonably required for the successful and efficient\n\nconduct of the unitized method or methods of operation for which the\n\nunit is created, and that the conduct thereof will have no material\n\nadverse effect upon the remainder of such common source of supply.\n\nThe plan of unitization for each such unit and unit area shall\n\nbe one suited to the needs and requirements of the particular unit\n\ndependent upon the facts and conditions found to exist with respect\n\nthereto. In addition to such other terms, provisions, conditions\n\nand requirements found by the Commission to be reasonably necessary\n\nor proper to effectuate or accomplish the purpose of this act, and\n\nsubject to the further requirements hereof, each such plan of\n\nunitization shall contain fair, reasonable and equitable provisions\n\nfor:\n\n(a) The efficient unitized management or control of the further\n\ndevelopment and operation of the unit area for the recovery of oil\n\nand gas from the common source of supply affected. Under such a\n\nplan the actual operations within the unit area may be carried on in\n\nwhole or in part by the unit itself, or by one or more of the\n\nlessees within the unit area as unit operator subject to the\n\nsupervision and direction of the unit, dependent upon what is most\n\nbeneficial or expedient. The designation of the unit operator shall\n\nbe by vote of the lessees in the unit in a manner provided in the\n\nplan of unitization and not by the Commission.\n\n(b) The division of interest or formula for the apportionment\n\nand allocation of the unit production, among and to the several\n\nseparately owned tracts within the unit area such as will reasonably\n\npermit persons otherwise entitled to share in or benefit by the\n\nproduction from such separately owned tracts to produce or receive,\n\nin lieu thereof, their fair, equitable and reasonable share of the\n\nunit production or other benefits thereof. A separately owned\n\ntract's fair, equitable and reasonable share of the unit production\n\nshall be measured by the value of each such tract for oil and gas\n\npurposes and its contributing value to the unit in relation to like\n\nvalues of other tracts in the unit, taking into account acreage, the\n\nquantity of oil and gas recoverable therefrom, location on\n\nstructure, its probable productivity of oil and gas in the absence\n\nof unit operations, the burden of operation to which the tract will\n\nor is likely to be subjected, or so many of said factors, or such\n\nother pertinent engineering, geological, or operating factors, as\n\nmay be reasonably susceptible of determination. Unit production as\n\nthat term is used in this act shall mean and include all oil and gas\n\nproduced from a unit area from and after the effective date of the\n\norder of the Commission creating the unit regardless of the well or\n\ntract within the unit area from which the same is produced.\nther pertinent engineering, geological, or operating factors, as\n\nmay be reasonably susceptible of determination. Unit production as\n\nthat term is used in this act shall mean and include all oil and gas\n\nproduced from a unit area from and after the effective date of the\n\norder of the Commission creating the unit regardless of the well or\n\ntract within the unit area from which the same is produced.\n\n(c) The manner in which the unit and the further development and\n\noperation of the unit area shall or may be financed and the basis,\n\nterms and conditions on which the cost and expense thereof shall be\n\napportioned among and assessed against the tracts and interests made\n\nchargeable therewith, including a detailed accounting procedure\n\ngoverning all charges and credits incident to such operations.\n\nReasonable provision shall be made in the plan of unitization for\n\ncarrying or otherwise financing lessees who are unable to promptly\n\nmeet their financial obligations in connection with the unit by\n\nestablishing a fair rate of interest to all concerned based upon the\n\nterms and conditions as to time and by establishing a penalty\n\nprovision which shall be defined as the total expenses minus any\n\ncash contributions received as follows:\n\n1. One hundred percent (100%) of that portion of the cost of\n\naboveground surface equipment beyond the wellhead connections,\n\nincluding but not limited to stock tanks, separators, treaters,\n\npumping equipment and piping, plus one hundred percent (100%) of the\n\nshare of the cost of operation of the unit which shall be subject to\n\nthe established rate of interest;\n\n2. Three hundred percent (300%) of that portion of the costs\n\nand expenses of drilling wells in the unitized area, including but\n\nnot limited to staking, well site preparation, rigging up or\n\ndrilling and reworking, deeping or plugging back and testing and\n\ncompleting the wells; and\n\n3. Three hundred percent (300%) of that portion of the costs\n\nand expenses of the underground pipeline systems, expenses for\n\ninjected substances and any other incurred expenses which are not\n\nrecoupable in the further development and operation of the unit\n\narea.\n\n(d) The procedure and basis upon which wells, equipment and\n\nother properties of the several lessees within the unit area are to\n\nbe taken over and used for unit operations, including the method of\n\narriving at the compensation therefor, or of otherwise\n\nproportionately equalizing or adjusting the investment of the\n\nseveral lessees in the project as of the effective date of unit\n\noperation.\n\n(e) The creation of an operating committee to have general\n\noverall management and control of the unit and the conduct of its\n\nbusiness and affairs and the operations carried on by it, together\n\nwith the creation or designation of such other subcommittees, boards\n\nor officers to function under authority of the operating committee\n\nas may be necessary, proper or convenient in the efficient\n\nmanagement of the unit, defining the powers and duties of all such\n\ncommittees, boards or officers and prescribing their tenure and time\n\nand method for their selection.\n\n(f) The time when the plan of unitization shall become and be\n\neffective.\n\n(g) The time when and conditions under which and the method by\n\nwhich the unit shall or may be dissolved and its affairs wound up.","path":["OK Code","Title 52"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os52.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"9ac5a99382b5584fcd30f397d04222d45fc2000940af36a272bab023655fa38a","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-52-52-287.3","next":"us-ok/okla.-stat.-tit.-52-52-287.5"},"notice":"GroundRules: Original legal text. Not legal advice."}