{"data":{"id":"us-ok/okla.-stat.-tit.-52-52-87.9","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 52, § 52-87.9","heading":"Horizontal well unitization for targeted reservoirs","body":"A. Horizontal Well Unitization for Targeted Reservoirs.\n\nUnder limited circumstances and conditions contained in this\n\nsection, the Corporation Commission is authorized to unitize a\n\ntargeted reservoir for the drilling of horizontal wells to the end\n\nthat a greater ultimate recovery of oil and gas may be had\n\ntherefrom, waste is prevented, and the correlative rights of the\n\nowners are protected. Unless and until a unit created pursuant to\n\nthis section is effective, nothing in this section shall prohibit\n\nthe drilling of a horizontal well within a drilling and spacing unit\n\ncreated pursuant to Section 87.1 of this title.\n\nB. Prerequisites for Unitization.\n\nUpon the filing of an appropriate application, and after notice\n\nand hearing, the Commission shall determine if:\n\n1. The proposed unitization of the targeted reservoir is\n\nreasonably calculated to increase the ultimate recovery of oil and\n\ngas from the targeted reservoir through the use of horizontal well\n\ntechnology to drill one or more horizontal wells in the unit;\n\n2. The use of horizontal well technology to drill the\n\nhorizontal well or wells in the targeted reservoir is feasible, will\n\nprevent waste, will protect correlative rights and will with\n\nreasonable probability result in the increased recovery of\n\nsubstantially more oil and gas from the targeted reservoir within\n\nthe unit than would otherwise be recovered;\n\n3. The estimated additional cost, if any, of conducting the\n\nhorizontal well operations is not anticipated to exceed the value of\n\nthe additional oil and gas to be recovered; and\n\n4. The unitization and the use of horizontal well technology to\n\ndrill one or more horizontal wells is for the common good and will\n\nresult in the general advantage of the owners of the oil and gas\n\nrights within the unit.\n\nUpon making these findings, the Commission may enter an order\n\ncreating the unit and providing for the unitized operation of the\n\ntargeted reservoir described in the order, all upon terms and\n\nconditions as may be shown by the evidence to be fair, reasonable,\n\nequitable and which are necessary or proper to protect and safeguard\n\nthe respective rights and obligations of the several persons\n\naffected, including royalty owners, owners of overriding royalties\n\nand others, as well as the lessees. The application shall set forth\n\na description of the proposed unit with a map or plat thereof\n\nattached, shall allege the existence of the facts required to be\n\nfound by the Commission as provided in this subsection and shall\n\nhave attached thereto a recommended plan of development which is\n\napplicable to the proposed unit and which is fair, reasonable and\n\nequitable.\n\nC. Size of the Unit.\n\nEach unit shall be two governmental sections. However, the\n\nCommission may expand the size of the unit by including additional\n\ngovernmental sections up to a maximum unit size of four governmental\n\nsections, if for good cause shown the Commission finds the expansion\n\nof the unit size beyond two governmental sections is necessary to\n\nprevent waste, to protect correlative rights and will result in the\n\nincreased recovery of substantially more oil and gas from the\n\ntargeted reservoir than would otherwise be recovered based upon, but\n\nnot necessarily limited to:\n\n1. Geological features existing within the proposed unit;\n\n2. The proposed location or orientation of the horizontal\n\nwells;\n\n3. The length of the laterals of the proposed horizontal wells;\n\n4. The proposed use of multilateral wells; or\n\n5. Any combination thereof.\n\nD. Ownership of Oil and Gas Rights within the Unit.\n\nWhere there are, or may thereafter be, two or more separately\n\nowned tracts within the unit, each owner of oil and gas rights\n\nwithin the unit shall own an interest in the unit of the same\n\ncharacter as the ownership of the owner in the separately owned\n\ntract. From and after the effective date of the order of the\nr\n\n5. Any combination thereof.\n\nD. Ownership of Oil and Gas Rights within the Unit.\n\nWhere there are, or may thereafter be, two or more separately\n\nowned tracts within the unit, each owner of oil and gas rights\n\nwithin the unit shall own an interest in the unit of the same\n\ncharacter as the ownership of the owner in the separately owned\n\ntract. From and after the effective date of the order of the\n\nCommission creating the unit and subject to the provisions of any\n\npooling order covering the unit, the interest of each owner in the\n\nunit shall be defined as the percentage of interest owned in each\n\nseparate tract by the owner, multiplied by the proportion that the\n\nacreage in each separately owned tract bears to the entire acreage\n\nof the unit. The costs incurred in connection with and the\n\nproduction and proceeds from the wells in the unit shall be\n\nallocated to each separate tract in the unit and shall be borne or\n\nshared by the owners in each separate tract based upon and\n\ndetermined by the interest of each owner in the tract. However, if\n\na well or wells already exist within the area of the proposed unit\n\nwhich are producing or have produced or appear to be productive from\n\nthe targeted reservoir being unitized, the Commission may adjust the\n\nsharing of future costs incurred in connection with and future\n\nproduction and proceeds from any existing well or any subsequent\n\nwell in the proposed unit in any manner deemed necessary by the\n\nCommission in order to protect the correlative rights of the owners\n\nwithin any existing well or any subsequent well or within the unit,\n\nincluding providing for the sharing of future costs incurred in\n\nconnection with and future production and proceeds from any existing\n\nwell or any subsequent well in a manner different from any other\n\nwell in the unit so long as the various methods of sharing future\n\ncosts, production and proceeds from the existing and subsequent\n\nwells in the unit prevents waste and protects the correlative rights\n\nof all the affected owners. For the purpose of this section, any\n\nowner or owners of oil and gas rights in and under an unleased tract\n\nof land within the unit, unless the owner has relinquished the\n\ndrilling rights or working interest of the owner in the applicable\n\ntargeted reservoir in the tract of land under a pooling order\n\nentered by the Commission which order remains in effect, shall be\n\nregarded as a lessee to the extent of a seven-eighths (7/8) interest\n\nin and to the rights and a lessor to the extent of the remaining\n\none-eighth (1/8) interest therein.\n\nE. The Plan of Development.\n\nThe application shall include a proposed plan of development.\n\nBased upon the facts and conditions found to exist with respect to a\n\nproposed unit, the Commission shall determine the necessary terms,\n\nprovisions, conditions and requirements to be included in the plan\n\nof development for the unit. If a well or wells already exist\n\nwithin the area of the proposed unit which are producing or have\n\nproduced or appear to be productive from the targeted reservoir\n\nbeing unitized, the plan of development shall also include:\n\n1. Any adjustments to the sharing of future costs incurred in\n\nconnection with future development and production, and the sharing\n\nof proceeds, from any existing well or any subsequent well which the\n\nCommission determines to be necessary in order to be fair,\n\nreasonable and equitable, and to protect the correlative rights of\n\nthe owners, considering the existing development in and the prior\n\nand anticipated future production from the targeted reservoir within\n\nthe unit; and\n\n2. The procedure and basis upon which existing wells, equipment\n\nand other properties of the several lessees within the unit area are\n\nto be taken over and used for the unit operations, including the\n\nmethod of arriving at the compensation therefor, or of otherwise\n\nproportionately equalizing or adjusting the investment of the\ned future production from the targeted reservoir within\n\nthe unit; and\n\n2. The procedure and basis upon which existing wells, equipment\n\nand other properties of the several lessees within the unit area are\n\nto be taken over and used for the unit operations, including the\n\nmethod of arriving 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\nF. Order of the Commission.\n\nThe order of the Commission creating the unit shall:\n\n1. Designate the size and shape of the unit;\n\n2. Set forth the drilling pattern and setbacks for the unit,\n\nincluding the permitted well location tolerances for the permitted\n\nwells within the unit;\n\n3. Approve and adopt the plan of development for the unit, with\n\na copy thereof attached to the order and include any necessary\n\nspecial allocation factors for allocating the costs, production and\n\nproceeds from the proposed unit resulting from existing wells or\n\nsubsequent wells, or both;\n\n4. Designate the unit operator; and\n\n5. Provide for the conditions upon which the unit, and the\n\norder creating the unit, shall terminate.\n\nG. Consent by Owners.\n\nNo order of the Commission creating a unit pursuant to this\n\nsection shall become effective unless and until the proposed\n\nunitization has been consented to in writing, and the written\n\nconsent submitted to the Commission, by lessees of record of not\n\nless than sixty-three percent (63%) of the working interest in the\n\ntargeted reservoir in each spacing unit in the area to be included\n\nin the unit and by owners of record of not less than sixty-three\n\npercent (63%), exclusive of any royalty interest owned by any lessee\n\nor by any subsidiary of any lessee, of the one-eighth (1/8) royalty\n\ninterest in the targeted reservoir in each spacing unit in the area\n\nto be included in the unit in an express writing separate from the\n\noil and gas lease. The Commission shall make a finding in the order\n\ncreating the unit as to whether the requisite consent has been\n\nobtained. Where the requisite consent has not been obtained at the\n\ntime the order creating the unit is entered, the Commission shall,\n\nupon application and notice, hold any additional and supplemental\n\nhearings as may be requested or required to determine if and when\n\nthe requisite consent has been obtained and the date the unitization\n\nwill become effective. In the event lessees and royalty owners, or\n\neither, owning the required percentage interest in and to the unit\n\narea have not so consented to the unitization within a period of six\n\n(6) months from and after the date on which the order creating the\n\nunit is entered, the order creating the unit shall cease to be of\n\nfurther force and effect and shall be revoked by the Commission.\n\nH. Notice.\n\nThe application for the creation of a horizontal well\n\nunitization under this section, and the notice of hearing on the\n\napplication, shall be served no less than fifteen (15) days prior to\n\nthe date of the hearing, by regular mail, upon each person or\n\ngovernmental entity having the right to share in production from the\n\nproposed unit covered by the application, as well as other persons\n\nor governmental entities required by Commission rules. Any person\n\naggrieved by any order of the Commission made pursuant to this\n\nsection may appeal therefrom to the Supreme Court of the State of\n\nOklahoma upon the same conditions, within the same time and in the\n\nsame manner as is provided for in this title, for the taking of\n\nappeals from the orders of the Commission made thereunder.\n\nI. Pooling of the Unit.\n\nFrom and after the effective date of an order creating a unit\n\npursuant to this section and subject to the provisions of the order\n\nin regard to the matters to be found by the Commission in the\n\ncreation of the unit and the provisions of the applicable plan of\nr as is provided for in this title, for the taking of\n\nappeals from the orders of the Commission made thereunder.\n\nI. Pooling of the Unit.\n\nFrom and after the effective date of an order creating a unit\n\npursuant to this section and subject to the provisions of the order\n\nin regard to the matters to be found by the Commission in the\n\ncreation of the unit and the provisions of the applicable plan of\n\ndevelopment, an owner of the right to drill for and produce oil or\n\ngas from the unit may request the Commission to pool the oil and gas\n\ninterests of the owners in the unit on a unitwide basis pursuant to\n\nthe provisions of subsection (e) of Section 87.1 of this title in\n\nregard to the development of the unit.\n\nJ. Effect on Existing Spacing Units and Pooling Orders.\n\nFrom and after the effective date of an order creating a unit\n\npursuant to this section, the operation of any well producing from\n\nthe targeted reservoir within the unit defined in the order by\n\npersons other than the unit operator, or except in the manner and to\n\nthe extent provided in the order creating the unit shall be unlawful\n\nand is hereby prohibited. Once the order of the Commission creating\n\na unit pursuant to this section becomes effective, the unit so\n\ncreated shall supersede any drilling and spacing unit previously\n\nformed by the Commission pursuant to Section 87.1 of this title for\n\nthe same targeted reservoir within the area of the new unit. Any\n\npooling order which was entered by the Commission pursuant to\n\nsubsection (e) of Section 87.1 of this title covering any drilling\n\nand spacing unit superseded by a unit created pursuant to this\n\nsection and which was in effect at the time of the creation of the\n\nunit shall remain in full force and effect as to any oil and gas\n\ninterests in the targeted reservoir which were relinquished and\n\ntransferred by operation of law under the pooling order. However,\n\nfurther development of the targeted reservoir in the area of the\n\nunit created pursuant to this section shall not be subject to any of\n\nthe other provisions of any prior pooling order, but shall be\n\ngoverned by and pursuant to the order creating the unit, including\n\nthe applicable plan of development, and any subsequent pooling order\n\ncovering the unit.\n\nK. Payment of Proceeds.\n\nUnits created pursuant to this section shall be subject to the\n\nterms and provision of the PRSA.\n\nL. The Commissioners of the Land Office.\n\nThe Commissioners of the Land Office, or other proper board or\n\nofficer of the state having the control and management of state\n\nland, and the proper board or officer of any political, municipal,\n\nor other subdivision or agency of the state, are hereby authorized\n\nand shall have the power on behalf of the state or of any political,\n\nmunicipal, or other subdivision or agency thereof, with respect to\n\nland or oil and gas rights subject to the control and management of\n\nthe respective body, board, or officer, to consent to or participate\n\nin any unitization created pursuant to the Extended Horizontal Well\n\nDevelopment Act.\n\nM. Retained Jurisdiction.\n\nUpon the creation of a unit pursuant to this section, and\n\napproval of the plan of development in connection therewith, the\n\nCommission shall retain jurisdiction over the unit and the plan of\n\ndevelopment. The retained jurisdiction of the Commission set forth\n\nherein shall neither preclude nor impair the right of any affected\n\nparty to obtain through the district courts of this state any remedy\n\nor relief available at law or in equity for injuries caused by any\n\naction or inaction of the applicant, operator or any other affected\n\nparty.","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":"3e39911aec4a1f2cd5240716f0b9eb58f4121b7619a2e74ef6c88300cfc9285c","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-52-52-87.8","next":"us-ok/okla.-stat.-tit.-52-52-9"},"notice":"GroundRules: Original legal text. Not legal advice."}