§ 15-76-312 - Unlawful drainage -- Unit inclusion or accounting. - Arkansas Statutes

15-76-312. Unlawful drainage -- Unit inclusion or accounting.

(a) Any owner of an interest in a tract which is adjacent to a brine production unit formed by the Oil and Gas Commission and which is not included in that unit may petition the commission to have the tract included in the unit, and the commission shall issue its order after reasonable notice and hearing to include the tract under the same terms and conditions as those then existing with respect to other tracts in the unit, provided that it is demonstrated to the satisfaction of the commission that the tract is being unlawfully drained or is in imminent danger of being so drained through the operations of the adjacent unit.

(b) (1) Any owner of an interest or interests in brine, which are neither included in nor adjacent to a unit and which are being unlawfully drained by the actions of any producer, may petition the commission for an accounting for royalty or other compensation due from the producer.

(2) After investigating the claim presented in the petition and finding probable cause to believe the claims presented in the petition to be meritorious and after reasonable notice and hearing and subsequent finding that unlawful drainage has occurred, the commission shall issue its order:

(A) Stating the amount of royalty or other compensation then due and owing, as well as the manner of calculating the amount of royalty or other compensation subsequently due and owing to the owner; and

(B) Requiring the producer to pay over the amounts to the owner.

(3) For purposes hereof, the amount of royalty or other compensation due and owing to the owner and the manner of calculating any subsequent amount of royalty or other compensation shall be determined in accordance with 15-76-315 as if the owner were included in a unit.

(4) In the event that the producer fails to account to the owner as provided in the order of the commission, the commission shall seek to enjoin the operations of the producer responsible for the unlawful drainage. The owner, in any action in a court of this state may recover up to three (3) times the amount of royalty or other compensation found to be due and owing by the commission upon a finding by a court that the interest in brine of the owner has been unlawfully drained by the actions of the producer.

(c) As used in this section, "unlawful drainage" or "unlawfully drained" shall be the withdrawal or removal of brine by production or displacement which deprives the owner thereof of his or her fair and equitable share of brine in violation of his or her correlative rights.