Each unit created under the provisions of sections 38-08-09.1 through 38-08-09.16 is a
body politic and corporate, capable of suing, being sued, and contracting as such in its own
name. Each such unit is authorized on behalf and for the account of all the owners of the oil and
gas rights within the unit area, without profit to the unit, to supervise, manage, and conduct the
further development and operations for the production of oil and gas from the unit area,
pursuant to the powers conferred, and subject to the limitations imposed by the provisions of
sections 38-08-09.1 through 38-08-09.16 and by the plan of unitization.
The obligation or liability of the lessee or other owners of the oil and gas rights in the
several separately owned tracts for the payment of unit expense is at all tim
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Each unit created under the provisions of sections 38-08-09.1 through 38-08-09.16 is a
body politic and corporate, capable of suing, being sued, and contracting as such in its own
name. Each such unit is authorized on behalf and for the account of all the owners of the oil and
gas rights within the unit area, without profit to the unit, to supervise, manage, and conduct the
further development and operations for the production of oil and gas from the unit area,
pursuant to the powers conferred, and subject to the limitations imposed by the provisions of
sections 38-08-09.1 through 38-08-09.16 and by the plan of unitization.
The obligation or liability of the lessee or other owners of the oil and gas rights in the
several separately owned tracts for the payment of unit expense is at all times several and not
joint or collective and in no event may a lessee or other owner of the oil and gas rights in the
separately owned tract be chargeable with, obligated or liable, directly or indirectly, for more
than the amount apportioned, assessed, or otherwise charged to that person's interest in such
separately owned tract pursuant to the plan of unitization and then only to the extent of the lien
provided for within sections 38-08-09.1 through 38-08-09.16.
Any nonsigning working interest owner may withdraw from the unit to which that person's
interest is committed by transferring, without warranty of title, either express or implied, to the
unit operator on the behalf of the other working interest owners, all of that person's working
interest in all unit equipment and in all wells used in unit operations. The instrument of transfer
must be delivered to the unit operator. Such transfer relieves the withdrawing working interest
owner from any liability for unit operations except any incurred pursuant to sections 38-08-09.1
through 38-08-09.16. The interest so transferred is owned by the other working interest owners
in proportion to their respective participation in the unit. The unit operator, on the behalf of the
other working interest owners, in proportion to their respective interests so acquired, shall pay
the transferor for the transferor's interest in unit equipment and wells the net salvage value
thereof as determined by agreement between the transferor and the unit operator. In the event
such net salvage value is not agreed upon within sixty days after such transfer, then either party
may request a hearing of the matter before the commission, and, after notice and hearing, the
commission shall determine such value.
Subject to such reasonable limitations as may be set out in the plan of unitization, the unit
has a first and prior lien upon the leasehold production (exclusive of such interests which are
free of costs, such as royalties, overriding royalties, and production payments) in and to each
separately owned tract, the interest of the owners thereof in and to the unit production in the
possession of the unit, to secure the payment of the amount of the unit expense charged to and
assessed against such separately owned tract. The interest of the lessee or other persons who
by lease, contract, or otherwise are obligated or responsible for the cost and expense of
developing and operating a separately owned tract for oil and gas in the absence of unitization,
must, however, be primarily responsible for and charged with any assessment for unit expense
made against such tract. Any landowner royalty or any overriding royalty, or any production
payment which is a part of the unit production allocated to each separately owned tract must in
all events be regarded as royalty to be distributed to and among, or the proceeds thereof paid to
the royalty owners free and clear of all unit expense and free of any lien thereof.