{"data":{"id":"us-ok/okla.-stat.-tit.-52-52-87.8","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 52, § 52-87.8","heading":"Horizontal wells – Allocation of costs, production, and","body":"proceeds – Application for approval.\n\nA. Under the conditions contained in this section, the\n\nCorporation Commission is authorized to allow multiunit horizontal\n\nwells in any targeted reservoir or in more than one targeted\n\nreservoir, or in a targeted reservoir and an adjacent common source\n\nof supply, upon an appropriate finding by the Commission of the\n\nnecessity to comingle production from more than one targeted\n\nreservoir or an adjacent common source of supply in such multiunit\n\nhorizontal well, in order to prevent waste and protect the\n\ncorrelative rights of the owners of oil and gas rights.\n\nB. Ownership, Allocation of Costs, Commingled Production, and\n\nProceeds.\n\nThe Commission shall require the allocation of the reasonable\n\ndrilling, completion and production costs associated with such\n\nmultiunit horizontal well to each of the affected units which the\n\nwell actually penetrates within the completion interval and shall\n\nfurther require the allocation to each of the units affected by a\n\nmultiunit horizontal well of the commingled production, and the\n\nproceeds from the sale thereof, from the completion interval of such\n\nmultiunit horizontal well, with any allocation to be in a manner\n\nthat will prevent waste and protect the correlative rights of the\n\nowners of the oil and gas rights in each of the affected units which\n\nthe well actually penetrates within the completion interval.\n\n1. The allocation factor for each affected unit shall be\n\ndetermined by dividing the length of the completion interval located\n\nwithin the affected unit by the entire length of the completion\n\ninterval in the subject multiunit horizontal well. The Commission\n\nshall have the authority to adjust the allocation factors, based\n\nupon reasonable testimony and evidence presented to the Commission,\n\nif necessary to prevent waste and adequately protect the correlative\n\nrights of the owners of the oil and gas rights in each of the\n\naffected units.\n\n2. Each party who participates as a working interest owner in a\n\nmultiunit horizontal well shall own an undivided interest in all\n\nportions of the wellbore of the well and in the equipment on or in\n\nthe well in the same ratio that the party's allocated portion of the\n\ntotal costs of the well and equipment bears to the total costs of\n\nthe well and equipment. The ownership of undivided interest\n\ndescribed in this paragraph shall not affect or prejudice the\n\nownership of oil and gas rights of the affected owners outside of\n\nthe targeted reservoir for the multiunit horizontal well.\n\n3. A multiunit horizontal well shall be treated as a well in\n\neach of the affected units and shall be subject to all of the rules\n\notherwise applicable to any other well in any of the affected units.\n\nIn allowing a multiunit horizontal well, the Commission, under\n\nSection 87.1 of this title, may grant any necessary exceptions to\n\nthe permitted well location tolerances in each of the affected units\n\nfor the well and permit the well as an additional well in each of\n\nthe affected units. When an owner has drilled or proposes to drill\n\na multiunit horizontal well or wells and the owners of a present\n\nright to drill in any of the affected units have not agreed to pool\n\ntheir interests in the unit or units for the targeted reservoir, the\n\nCommission, under Section 87.1 of this title, may, upon the filing\n\nof a proper application therefor, require the owners to pool their\n\ninterests in the targeted reservoir in each affected unit on a\n\nunitwide basis as to the respective unit in regard to the\n\ndevelopment involving the portion of the multiunit horizontal well\n\nor wells located within the affected unit. Furthermore, if the\n\nCommission has previously entered an order pooling the interests of\n\nowners in an affected unit in which a multiunit horizontal well or\n\nwells have been drilled or are proposed to be drilled, the\n\nCommission, under Section 87.1 of this title may, upon the filing of\ne\n\ndevelopment involving the portion of the multiunit horizontal well\n\nor wells located within the affected unit. Furthermore, if the\n\nCommission has previously entered an order pooling the interests of\n\nowners in an affected unit in which a multiunit horizontal well or\n\nwells have been drilled or are proposed to be drilled, the\n\nCommission, under Section 87.1 of this title may, upon the filing of\n\na proper application therefor, amend the pooling order to the extent\n\nnecessary to have the pooling order cover the development involving\n\nthe portion of the multiunit horizontal well or wells located within\n\nthe affected unit.\n\n4. The application shall include:\n\na. the approximate anticipated location of the proposed\n\nmultiunit horizontal well or wells,\n\nb. a map or maps indicating the location of each\n\ncurrently existing well in each affected unit which is\n\nthe subject of the application and the anticipated\n\nlocation of each multiunit horizontal well currently\n\nproposed to be drilled in each affected unit as a\n\nresult of the application and any other horizontal\n\nwell not included in the current application, but\n\nanticipated to be necessary, based upon the\n\ninformation and knowledge then available to the\n\napplicant, for the full and efficient development and\n\noperations of the targeted reservoir within the\n\naffected units if the well or wells are approved by\n\nthe Commission upon the filing of a proper application\n\nat a future date, and\n\nc. any applicable proposed allocation factor or factors\n\nfor allocating the costs, production and proceeds from\n\neach proposed multiunit horizontal well under the\n\napplication.\n\n5. Production from the completion interval in the targeted\n\nreservoir from each of the affected units in which a multiunit\n\nhorizontal well is completed may be commingled in the wellbore of\n\nthe well and produced to the surface. The commingled production\n\nfrom a multiunit horizontal well shall be allocated to each of the\n\naffected units based upon the allocation factors approved by the\n\nCommission.\n\n6. In granting an application for a multiunit horizontal well\n\nor wells, the Commission shall find, based on the testimony and\n\nevidence presented, that given the information and knowledge then\n\navailable, the proposed multiunit horizontal well or wells will\n\nprevent waste, protect correlative rights and likely will aid in the\n\nfull and efficient development of each of the affected units.\n\n7. The wellbore royalty proceeds for a multiunit horizontal\n\nwell shall be allocated to each affected unit by multiplying the\n\nroyalty contribution factor of the unit by the wellbore royalty\n\nproceeds, with the resulting product being the royalty proceeds for\n\nthat unit. Each royalty interest owner in an affected unit shall be\n\nentitled to receive the owner's proportionate royalty share of the\n\nallocated royalty proceeds for that unit.\n\n8. The multiunit horizontal well shall be subject to the\n\nprovisions of the Product Revenue Standards Act (PRSA). The\n\noperator of the multiunit horizontal well shall be the designated\n\nroyalty distributor pursuant to the PRSA for the multiunit\n\nhorizontal well, unless there is a diversity of operators in the\n\naffected units from which the multiunit horizontal well is producing\n\nand another operator in each of the affected units agrees to perform\n\nseparately the PRSA royalty distribution functions for the unit.\n\nC. Application, Notice and Retained Jurisdiction.\n\nApplication for approval of a multiunit horizontal well shall be\n\nin a form prescribed by the Commission. The application, and the\n\nnotice of hearing on the application, shall be served no less than\n\nfifteen (15) days prior to the date of the hearing, by regular mail,\n\nupon each person or governmental entity having the right to share in\n\nproduction from each of the affected units covered by the\n\napplication, as well as other persons or governmental entities\nbe\n\nin a form prescribed by the Commission. The application, and the\n\nnotice of hearing on the application, shall be served no less than\n\nfifteen (15) days prior to the date of the hearing, by regular mail,\n\nupon each person or governmental entity having the right to share in\n\nproduction from each of the affected units covered by the\n\napplication, as well as other persons or governmental entities\n\nrequired by the rules of the Commission. Upon approval of a\n\nmultiunit horizontal well, the Commission shall retain jurisdiction\n\nover the well. The retained jurisdiction of the Commission set\n\nforth herein shall neither preclude nor impair the right of any\n\naffected party to obtain through the district courts of this state\n\nany remedy or relief available at law or in equity for injuries\n\ncaused by any action or inaction of the applicant, operator or any\n\nother affected party.","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":"4fb2b71269ba844e989d2b0643b124121c67cb332ba5114760f4c946bd103c37","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-52-52-87.7","next":"us-ok/okla.-stat.-tit.-52-52-87.9"},"notice":"GroundRules: Original legal text. Not legal advice."}