§ 15-72-317 - Findings to support order requiring salt water disposal unit operation. - Arkansas Statutes

15-72-317. Findings to support order requiring salt water disposal unit operation.

(a) If, after hearing and considering the petition and evidence offered in support thereof, the Oil and Gas Commission makes the following findings, it shall issue an order requiring salt water disposal unit operation in accordance with the terms of the proposed unit operating agreement:

(1) The proposed salt water disposal unit agreement has, or counterparts thereof have, been executed by persons who at the time of filing of the petition, owned of record legal title to at least an undivided seventy-five percent (75%) interest in the right to drill into and produce oil and gas from the total proposed unit area and by persons who at that time, owned of record legal title to seventy-five percent (75%) of royalty and overriding royalty payable with respect to oil and gas produced from the entire unit area;

(2) Salt water disposal unit operation of the pool proposed to be unitized is reasonably necessary to prevent waste, to increase ultimate recovery of oil or gas, and to protect correlative rights; and

(3) The value of the additional oil and gas to be recovered from the proposed unit area as a result of the proposed salt water disposal unit operation will exceed the additional cost incident to conducting the operation.

(b) The order and the provisions of the salt water disposal unit operating agreement shall, thereafter, be effective as to and binding upon each person owning an interest in the unit area, or in oil or gas produced therefrom or the proceeds thereof.

(c) With respect to an interest which is encumbered of record with a mortgage or deed of trust, both the grantor and grantee therein shall, for the purposes of subdivision (a)(1) of this section be considered as the record owner of legal title thereto. However, when the instrument gives the grantor in mortgage or deed of trust the right to execute such a unit agreement, the grantor shall for this purpose be deemed the record owner.