§ 15-72-310 - Order requiring unit operation -- Contents. - Arkansas Statutes

15-72-310. Order requiring unit operation -- Contents.

The order requiring unit operation shall be fair and reasonable under all circumstances and shall include:

(1) A description of the unit area;

(2) An allocation upon the basis agreed upon by the provisions of the unit operating agreement to each separately owned tract that for all purposes of this section and 15-72-308, 15-72-309, and 15-72-311 -- 15-72-322 may be a previously established drilling unit if the unit operating agreement so provides in the unit area its fair share of all of the oil and gas produced from the unit area and not required or consumed in the conduct of the operation of the unit area or unavoidably lost. No allocation formula shall be adopted by the Oil and Gas Commission and put into effect unless it is based on the relative contribution to the unit operation, other than physical equipment, made by each separately owned tract or previously established drilling unit;

(3) A provision for the credits and charges to be made in the adjustment among the owners of the unit area for their respective investments in wells, tanks, pumps, machinery, materials, and equipment contributed to the unit operation. The net amount charged against the owner or owners of a separately owned tract shall be considered expenses of unit operation chargeable against the tract;

(4) A provision that a part of the expenses of unit operation, including capital investments, be charged to each separately owned tract in the same proportion that the tract shares in the unit production. The expenses chargeable to a tract shall be paid by the person or persons who in the absence of unit operation would be responsible for the expense of developing and operating the tract;

(5) The time at which the unit operation shall commence; and

(6) Those additional provisions, not in conflict with or inconsistent with the unit operating agreement, which the commission determines to be appropriate for the prevention of waste and the protection of all interested parties.