The supervisor’s order issued pursuant to Section 3651 shall contain a fair basis for allocating production to such further tract or tracts of land and make fair and reasonable provisions under the circumstances in other respects for bringing into the unit operation such tract or tracts of land. In providing for the allocation of unit production from the enlarged unit area, the order shall, however, first treat the unit area previously established as a single tract, and the portion of unit production so allocated thereto shall then be allocated among the separately owned tracts of land included in such previously established unit area in the same proportion as specified therefor in the previous order. The supervisor shall allocate production from the enlarged unit area between the previously established unit area and the additional tract or tracts of land, and if there be more than one such additional tract of land, shall allocate the production allotted the additional tracts of land as between such additional tracts of land, in such a manner as will reasonably permit persons otherwise entitled to share in or benefit by the production from such tracts of land to produce or receive, in lieu thereof, their fair, equitable, and reasonable pro rata share of the unit production or other benefits thereof. A tract’s fair, equitable, and reasonable share of the unit production shall be measured by the value of each such tract of land for oil and gas purposes and its contributing value to the unit operation in relation to like values of other tracts in the unit, taking into account, among other things, the following:

(a) The primary tract value based upon the projected future value of hydrocarbon substances that would be produced by primary means from such tract after the date of unitization, if no secondary recovery operation were undertaken.

Terms Used In California Public Resources Code 3652

  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts

(b) The secondary tract value based upon consideration of the following factors:

(1) The volume in acre-feet of porous, permeable sand originally saturated with hydrocarbon substances within a zone to be unitized, and underlying such tract.

(2) The hydrocarbon substances per acre-foot of such zone recoverable by means of secondary recovery operations.

(3) The value of the hydrocarbon substances so recoverable from such tract from such zones to be unitized.

(4) In the event the necessary data is not available as listed in paragraphs (1), (2), and (3), the value may be assigned using a prudent engineering method, depending on the data available.

(c) All other factors which significantly bear upon the value of the committed properties for primary and secondary recovery.

(Added by Stats. 1971, Ch. 1673.)

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