§ 17-509 — Amendment and modification of property rights and

obligations - Distribution of production. Property rights, leases, contracts and all other obligations shall be regarded as amended and modified to the extent necessary to conform to the provisions and requirements of this act and to any valid and applicable plan of unitization of the Commission made and adopted pursuant hereto, but not otherwise. Nothing contained in this act shall be construed to require a transfer to, or to cause a vesting in, the unit of title to the separately owned tracts or leases within the unit area other than the right to use and operate the same to the extent set out in the plan of unitization. All property, whether real or personal, which the unit may in any way acquire or possess shall be held or possessed by the operator for the account and as agent of the several owners of the right to drill for and produce brine and shall be the property of such owners, subject, however, to the right of the operator to the possession, management, use or disposal of the same in the proper conduct of its affairs, and subject to any lien the operator may have thereon to secure the payment of unit expenses. The production allocated to each separately owned tract within the unit, and only that amount, regardless of the well or wells in the unit area from which it may be produced and regardless of whether it be more or less than the amount of production from the well or wells, if any, on any such separately owned tract, shall for all intents, uses and purposes be regarded and considered as production from such separately owned tract. Except as may be otherwise authorized in this act, or in the plan of unitization approved by the Commission, such production shall be distributed among or the proceeds thereof paid to the several persons entitled to share in production from such separately owned tract in the same manner that they would have participated in the production or proceeds thereof from such separately owned tract had not said unit been organized. Operations carried on under the plan of unitization shall be regarded as a fulfillment of and compliance with all of the provisions of the brine or solution gas leases or other contracts upon lands included within the unit area insofar as said leases or contracts may relate to the common source of supply or portion thereof included within the unit. Wells drilled on or operated on any part of the unit area, no matter where located, shall be regarded as wells drilled on each separately owned tract within the unit area.

Legislative History

Added by Laws 1990, c. 255, § 10, eff. Sept. 1, 1990.