§ 30:5 — Permission to convert gas into carbon black; recycling gas; unit operations

§5. Permission to convert gas into carbon black; recycling gas; unit operations
A. In order to prevent waste of natural gas, the secretary may grant to bona fide
applicants permits for the building and operation of plants and to burn natural gas into carbon
black for the period of time fixed by the secretary in the permit, not to exceed twenty-five
years and subject to the provisions of the laws of the state and the rules and regulations of
the department. It shall be a violation of this Chapter for any person to build or operate a new
plant for these purposes without the permit required by this Section.
B. In order to prevent waste and to avoid the drilling of unnecessary wells, the
secretary shall, after notice and upon hearing, and his determination of feasibility, require the
re-cycling of gas in any pool or portion of a pool productive of gas from which condensate
or distillate may be separated or natural gasoline extracted, and promulgate rules to unitize
separate ownership and to regulate production of the gas and reintroduction of the gas into
productive formations after separation of condensate or distillate, or extraction of natural
gasoline, from the gas.
C.(1) Without any way modifying the authority granted to the secretary in R.S.
30:9(B) to establish a drilling unit or units for a pool and in addition to the authority
conferred in Subsection B of this Section:
(a) The secretary of the office of conservation upon the application of any interested
party, also is authorized and empowered to enter an order requiring the unit operation of any
pool or a combination of two pools in the same field, productive of oil or gas, or both, in
connection with the institution and operation of systems of pressure maintenance by the
injection of gas, water, or any other extraneous substance, or in connection with any program
of secondary or tertiary recovery; and
(b) The secretary of the office of conservation is further authorized and empowered
to require the unit operation of a single pool in any situation where the ultimate recovery can
be increased and waste and the drilling of unnecessary wells can be prevented by such a unit
operation.
(2) In connection with such an order of unit operation, the secretary of the office of
conservation shall have the right to unitize, pool, and consolidate all separately owned tracts
and other property ownerships. Any order for such a unit operation shall be issued only after
notice and hearing and shall be based on all of the following findings:
(a) The order is reasonably necessary for the prevention of waste and the drilling of
unnecessary wells and will appreciably increase the ultimate recovery of oil, gas, or brine
from the affected pool or combination of two pools.
(b) The proposed unit operation is economically feasible.
(c) The order will provide for the allocation to each separate tract within the unit of
a proportionate share of the unit production which shall ensure the recovery by the owners
of that tract of their just and equitable share of the recoverable oil, gas, or brine in the
unitized pool or combination of two pools.
(d) At least three-fourths of the owners and three-fourths of the royalty owners, as to
a particular interest, as hereinafter defined, such three-fourths to be in interest as determined
under Subparagraph (c) of this Paragraph, shall have approved the plan and terms of unit
operation, such approval to be evidenced by a written contract or contracts covering the terms
and operation of the unitization signed and executed by the three-fourths in interest of the
owners and three-fourths in interest of the royalty owners and filed with the secretary of the
office of conservation on or before the day set for the hearing. Notwithstanding any other
provision of this Subparagraph to the contrary, with respect to an order for unit operation for
the production of brine, such approval shall only be required from at least three-fourths of
the owners as to the particular interest, such approval to be evidenced by a written contract
or contracts covering the terms and operation of the unitization signed and executed by the
three-fourths in interest of the owners and filed with the secretary of the office of
conservation on or before the day set for the hearing.
(3) The order requiring the unit operation shall designate a unit operator and shall
also make provision for the proportionate allocation to the owners (lessees or owners of
unleased interests) of the costs and expenses of the unit operation, which allocation shall be
in the same proportion that the separately owned tracts share in unit production. The cost of
capital investment in wells and physical equipment and intangible drilling costs, in the
absence of voluntary agreement among the owners to the contrary, shall be shared in like
proportion; however, no such owner who has not consented to the unitization shall be
required to contribute to the costs or expenses of the unit operation or to the cost of capital
investment in wells and physical equipment and intangible drilling costs except out of the
proceeds of production accruing to the interest of such owner out of production from such
unit operation. However, no well costs credit allowable shall be adjusted on the basis of less
than the average well costs within the unitized area. The order requiring unit operation shall
not vary nor alter any of the terms of the above required written contract or contracts
evidencing approval nor impose any terms or operations upon the non-signers of the contract
or contracts more onerous than the terms and operations set out in the contract or contracts.
(4) Upon application and after notice and a public hearing and consideration of all
available geological and engineering evidence, the secretary, to the extent required by such
evidence, may revise any reservoirwide unit or units heretofore created by the secretary.
(5) For the purpose of calculating the above required three-fourths in interest of
royalty owners, the term "royalty owner" shall mean any interested party other than the owner
of an unleased interest or a mineral lessee or the owner of any interest created out of the
interest of a mineral lessee, such as a net operating interest, overriding royalty, or production
payment. Solely for the purpose of calculating the above required three-fourths in interest
of owners and without expanding the definition of the term "owner" in R.S. 30:3, all
interested parties owning interests entitling them to share in production from a proposed unit
whose interests have been created out of that of a mineral lessee shall have their interests
considered as if they were owners.
(6) No order of the secretary entered pursuant hereto shall have the effect of
enlarging, displacing, varying, altering, or in anywise whatsoever modifying or changing
contracts in existence on the effective date of this Act concerning the unitization of any pool
(reservoir) or pools (reservoirs) or field (as defined in the contract) for the production of oil,
gas, brine, or any combination thereof.
D.(1) In order to prevent waste and increase the ultimate recovery of oil or gas, or
both, the secretary of the office of conservation, upon the application of any interested owner,
and only after notice and a public hearing, is authorized to approve a cyclic injection project
for the operation of a well by the method of enhanced recovery known as cyclic injection,
without the formation of a unit under Subsection C of this Section or under any other
provisions of this Chapter. No operator shall utilize cyclic injection without first securing the
secretary's approval pursuant to this Subsection. For the purposes of this Subsection, "cyclic
injection" is hereby defined as a single-well process in which a production well is injected
with a substance for the purpose of enhanced recovery. After a shut-in period, the well is
returned to production. This procedure may be performed repeatedly on one or more wells
in a reservoir.
(2) Prior to approving any cyclic injection project the secretary must find that the
project will not drain any area of the reservoir different from that being drained by the project
well prior to initiation of the project, and that the project will not otherwise adversely affect
other owners having rights in the same reservoir in which the applicant proposed to conduct
cyclic injection. If the secretary does not make these findings required in the preceding
sentence, he shall not approve the cyclic injection project, and it shall not be conducted,
unless:
(a) A unit encompassing the maximum area which may efficiently and economically
be drained by one well utilizing cyclic injection is formed under other provisions of this
Chapter, or
(b) A unit encompassing the entire reservoir is formed under Subsection C of this
Section.
(3) The approval of a cyclic injection project shall not cause any change or alteration
in the boundaries, tract participations or other aspects of any unit previously formed under
this Chapter except to the extent the unit is superseded by a unit formed under Subsection
C of this Section.
(4) No cyclic injection project approved under this Subsection shall qualify for
exemption from severance tax under R.S. 47:633.4, unless:
(a) A unit is formed under Subsection C of this Section and
(b) The project employs one of the techniques enumerated in, and otherwise qualifies
under, R.S. 47:633.4.
(5) Notwithstanding any other provision of law to the contrary, an owner, producer,
or operator in the Caddo Pine Island Field in Caddo Parish is hereby authorized to dispose
or reinject produced saltwaters into the productive interval of the Nacatoch Formation or the
Blossom Formation without unitization of the entire reservoir; however, the consent of the
other owners, producers, or operators operating within a one-fourth mile radius of such wells
shall be obtained prior to the commencement of the disposal or injection of such saltwaters.

Legislative History

Amended by Acts 1960, No. 441, §1; Acts 1984, No. 768, §1; Acts 1987, No. 363, §1; Acts 1992, No. 1052, §1; Acts 2019, No. 242, §1; Acts 2024, No. 126, §1; Acts 2025, No. 458, §1, eff. Oct. 1, 2025.