§ 57-909 — Spacing unit; pooling of interests; order of commission; provisions for drilling and operation; costs; determination; recording

Nebraska § 57-909

• Jurisdiction: Nebraska
• Ch. 57: Minerals, Oil, and Gas

Text

(1) When two or more separately owned tracts are
embraced within a spacing unit or
when there are separately owned interests in all or part of the spacing unit,
then the owners and royalty owners thereof may pool their interests for the
development and operation of the spacing unit. In the absence of voluntary
pooling, the commission, upon the application of any interested person, or
upon its own motion, may enter
an order pooling all interests in the spacing unit for the development and
operation thereof. Each such pooling order shall be made only after notice
and hearing and
shall be upon terms and conditions that are just and reasonable and that afford to the owner
of each tract or interest in the spacing unit the opportunity to recover or
receive, without unnecessary expense, his or
her just and equitable share. Operations incident to the drilling
of a well upon any portion of a spacing unit covered by a pooling order shall
be deemed, for all purposes, the conduct of such operations upon each separately
owned tract in the drilling unit by the several owners thereof. That portion
of the production allocated to each tract included in a spacing unit covered
by a pooling order shall, when produced, be deemed for all purposes to have
been produced from such tract by a well drilled thereon.
(2) Each such pooling order shall make provision for the drilling and
operation of the authorized well on the spacing unit and for the payment of the reasonable actual
cost thereof, including a reasonable charge for supervision. As to each owner
who refuses to agree upon the terms for drilling and operating the well, the
order shall provide for reimbursement for his or her share of the costs out of, and only out
of, production from the unit representing his or her interest, excluding royalty or other
interest not obligated to pay any part of the cost thereof. In the event of
any dispute as to such cost, the commission shall determine the proper cost.
The order shall determine the interest of each owner in the unit and may provide in substance
that, as to each owner who agrees with the person or persons drilling and
operating the well for the payment by the owner of his or her share of the costs, such owner, unless
he or she has agreed
otherwise, shall be entitled to receive, subject to royalty or similar obligations,
the share of the production of the well applicable to the tract of the consenting
owner; and as to each owner who does not agree, he or she shall be entitled to receive from the
person or persons drilling and operating such well on the unit his or her share of the production
applicable to his or her interest,
after the person or persons drilling and operating such well
have recovered, depending on
the total measured depth of the well, three hundred percent for wells less
than five thousand feet deep, four hundred percent for wells five thousand
feet deep but less than six thousand five hundred feet deep, and five hundred
percent for wells six thousand five hundred feet deep or deeper, of that
portion of the costs and expenses of staking, well site preparation, drilling,
reworking, deepening or plugging back, testing, completing, and other intangible
expenses approved by the commission chargeable to each owner who does not
agree, and, depending on the
total measured depth of the well, two hundred percent for wells less than
five thousand feet deep, three hundred percent for wells five thousand feet
deep but less than six thousand five hundred feet deep, and five hundred percent
for wells six thousand five hundred feet deep or deeper, of all
equipment including wellhead connections, casing, tubing, packers, and other
downhole equipment and surface equipment, including, but not limited to, stock tanks, separators, treaters, pumping
equipment, and piping, plus one hundred percent of the nonconsenting owner's
share of the cost of operation and a reasonable rate of interest on the unpaid
balance. For the purpose of this section, the owner or owners of oil and gas
rights in and under an unleased tract of land shall be regarded as a lessee
to the extent of a seven-eighths interest in and to such rights and a lessor
to the extent of the remaining one-eighth interest therein.
(3) A certified copy of the order may be filed for record with the county
clerk or register of deeds of the county, as the case may be, where the property
involved is located, which recording shall constitute constructive notice
thereof. The county clerk, or register of deeds, as the case may be, shall
record the same in the real property records of the county and shall index
the same against the property affected.

Legislative History

Source: Laws 1959, c. 262, § 9, p. 907; Laws 1978, LB 447, § 1; Laws 2011, LB458, § 1. Annotations: Waste occurs when an owner in a pool produces more than his just and equitable share of the oil therefrom. Ohmart v. Dennis, 188 Neb. 260, 196 N.W.2d 181 (1972). Pooling order herein was entered in conformity to requirements of act. Farmers Irr. Dist. v. Schumacher, 187 Neb. 825, 194 N.W.2d 788 (1972).