27-533. Ratification or approval of plan by lessees and owners

510 words·~2 min read·/az/title-27/27-533

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. No order of the commission creating a unit and prescribing the plan of unitization applicable thereto shall become effective unless and until the plan of unitization has been signed, or in writing ratified or approved by lessees of record of not less than sixty-three per cent of the unit area affected thereby and by owners of record of not less than sixty-three per cent (exclusive of royalty interest owned by lessees or by subsidiaries of any lessee) of the normal one-eighth royalty interest in and to the unit area, and the commission has made a finding either in the order creating the unit or in a supplemental order that the plan of unitization has been so signed, ratified or approved by lessees and royalty owners owning the required percentage interest in and to the unit area.

Where the plan of unitization has not been so signed, ratified or approved by lessees and royalty owners owning the required percentage interest in and to the unit area at the time the order creating the unit is made, the commission shall, upon petition and notice, hold such additional and supplemental hearings as may be requested or required to determine if and when the plan of unitization has been so signed, ratified or approved by lessees and royalty owners owning the required percentage interest in and to the unit area and shall, in respect to such hearings, make and enter a finding of its determination in such regard.

In the event lessees and royalty owners, or either, owning the required percentage interest in and to the unit area have not so signed, ratified or approved the plan of unitization within a period of six months from and after the date on which the order creating the unit is made, the order creating the unit shall cease to be of further force and effect and shall be revoked by the commission.

B. An order providing for unit operations may be amended by an order made by the commission, in the same manner and subject to the same conditions as an original order providing for unit operations, provided:

1. If such an amendment affects only the rights and interests of the owners, the approval of the amendment by the royalty owners shall not be required.

2. No such order of amendment shall change the percentage for allocation of oil and gas as established for any separately owned tract by the original order, except with the consent of all persons owning interests in such tract.

C. The commission, by an order, may provide for the unit operation of a pool or a part thereof that embraces a unit area established by a previous order of the commission. Such order, in providing for the allocation of unit production, shall first treat the unit area previously established as a single tract, and the portion of the unit production so allocated thereto shall then be allocated among the separately owned tracts included in such previously established unit area in the same proportions as those specified in the previous order.