§ 3643
458 words·~2 min read·
/ca/public-resources-code/3643A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The unit agreement shall be approved, if, after a public hearing, the supervisor finds all of the following:
(a)The unit area of the proposed agreement for unit operation takes in all tracts which, consistent with good oilfield practice, should be considered a part of and related to the field or pool or pools, or portions thereof, proposed for unit operation but does not include tracts which, consistent with good oilfield practice, should not be considered a part of or related to the field or pool or pools, or portions thereof, proposed for unit operation.
(b)As of the date of filing of the petition, the proposed unit agreement was consented to by persons owning at least three-fourths of the working interests and three-fourths of the lessors’ royalty interests as described in Section 3642.
(c)The unitized management and operation of the pool or pools, or portions thereof, proposed to be unitized is reasonably necessary in order to carry on pressure maintenance or pressure replenishment operations, cycling or recycling operations, gas injection operations, water flooding operations, reduction of oil viscosity operations, or any combination thereof, or any other form of joint effort calculated to increase the ultimate recovery of oil and gas from the proposed unit area.
(d)The value of the estimated recovery of additional oil or gas, or the increased present worth value due to accelerated recovery of oil or gas, as a result of the unit operations will exceed the estimated additional cost incident to conducting such operations.
(e)The proposed unit agreement provides for an allocation of the unit production among and to the separately owned tracts in the area proposed to be unitized such as will reasonably permit persons otherwise entitled to share in or benefit by the production from such separately owned tracts to produce or receive, in lieu thereof, their fair, equitable, and reasonable pro rata share of the unit production or other benefits thereof.
(f)The proposed unit agreement provides, to the full extent practical, for the organization and consolidation of surface facilities, including oil production, storage, treatment, and transportation facilities, in such a manner as will eliminate wasteful and excessive use of land surface areas, freeing such areas for other productive use and development, and provides a fair procedure for the waiver, from time to time, of the working interest owners’ right of entry on surface areas which in the future become unneeded for the conduct of unit operations.
(g)The proposed unit agreement is fair and reasonable under all the circumstances in other material respects.
(h)If state-owned lands under the jurisdiction of the State Lands Commission are included in the proposed unit agreement, such agreement has been reviewed and approved by the commission as to such lands.