(4) |
(a) |
(i) |
Each pooling order shall provide for the payment of just and reasonable costs incurred in the drilling and operating of the drilling unit, including:
(A) |
the costs of drilling, completing, equipping, producing, gathering, transporting, processing, marketing, and storage facilities; |
(B) |
reasonable charges for the administration and supervision of operations; and |
(C) |
other costs customarily incurred in the industry. |
|
(ii) |
An owner is not liable under a pooling order for costs or losses resulting from the gross negligence or willful misconduct of the operator. |
|
(b) |
Each pooling order shall provide for reimbursement to the consenting owners for any nonconsenting owner‘s share of the costs out of production from the drilling unit attributable to the nonconsenting owner’s tract. |
(c) |
Each pooling order shall provide that each consenting owner shall own and be entitled to receive, subject to royalty or similar obligations:
(i) |
the share of the production of the well applicable to the consenting owner’s interest in the drilling unit; and |
(ii) |
unless the consenting owner has agreed otherwise, the consenting owner’s proportionate part of the nonconsenting owner’s share of the production until costs are recovered as provided in Subsection (4)(d). |
|
(d) |
(i) |
Each pooling order shall provide that each nonconsenting owner shall be entitled to receive, subject to royalty or similar obligations, the share of the production of the well applicable to the nonconsenting owner’s interest in the drilling unit after the consenting owners have recovered from the nonconsenting owner’s share of production the following amounts less any cash contributions made by the nonconsenting owner:
(A) |
100% of the nonconsenting owner’s share of the cost of surface equipment beyond the wellhead connections, including stock tanks, separators, treaters, pumping equipment, and piping; |
(B) |
100% of the nonconsenting owner’s share of the estimated cost to plug and abandon the well as determined by the board; |
(C) |
100% of the nonconsenting owner’s share of the cost of operation of the well commencing with first production and continuing until the consenting owners have recovered all costs; and |
(D) |
an amount to be determined by the board but not less than 150% nor greater than 400% of the nonconsenting owner’s share of the costs of staking the location, wellsite preparation, rights-of-way, rigging up, drilling, reworking, recompleting, deepening or plugging back, testing, and completing, and the cost of equipment in the well to and including the wellhead connections. |
|
(ii) |
The nonconsenting owner’s share of the costs specified in Subsection (4)(d)(i) is that interest which would have been chargeable to the nonconsenting owner had the nonconsenting owner initially agreed to pay the nonconsenting owner’s share of the costs of the well from commencement of the operation. |
(iii) |
A reasonable interest charge may be included if the board finds it appropriate. |
|
(e) |
If there is any dispute about costs, the board shall determine the proper costs. |
|