Sec. 23.3. The Department, upon the petition of any interested person, shall hold a public hearing to consider the need for operating a pool, pools, or any portion thereof.

721 words·~3 min read·/il/chapter-225/act-725/23-3

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Sec. 23.3. The Department, upon the petition of any interested person, shall hold a public hearing to consider the need for operating a pool, pools, or any portion thereof, as a unit to enable, authorize and require operations which will increase the ultimate recovery of oil and gas, prevent the waste of oil and gas, and protect correlative rights of the owners of the oil and gas.

(1)Such petition shall contain the following:

(a)A description of the land and pool, pools, or parts thereof, within the proposed

unit area.

(b)The names of all persons owning or having an interest in the oil and gas rights in

the proposed unit area as of the date of filing the petition, as disclosed by the records in the office of the recorder for the county or counties in which the unit area is situated, and their addresses, if known. If the address of any person is unknown, the petition shall so indicate.

(c)A statement of the type of operations contemplated for the unit area.

(d)A copy of a proposed plan of unitization signed by persons owning not less than 51%

of the working interest underlying the surface within the area proposed to be unitized, which the petitioner considers fair, reasonable and equitable; said plan of unitization shall include (or provide in a separate unit operating agreement, if there be more than one working interest owner, a copy of which shall accompany the petition) the following:

(i)A plan for allocating to each separately owned tract in the unit area its share

of the oil and gas produced from the unit area and not required or consumed in the conduct of the operation of the unit area or unavoidably lost.

(ii)A provision indicating how unit expense shall be determined and charged to the

several owners, including a provision for carrying or otherwise financing any working interest owner who has not executed the proposed plan of unitization and who elects to be carried or otherwise financed, and allowing the unit operator, for the benefit of those working interest owners who have paid the development and operating costs, the recovery of not more than 150% of such person's actual share of development costs of the unit plus operating costs, with interest. Recovery of the money advanced to owners wishing to be financed, for development and operating costs of the unit, together with such other sums provided for herein, shall only be recoverable from such owner's share of unit production from the unit area.

(iii)A procedure and basis upon which wells, equipment, and other properties of the

several working interest owners within the unit area are to be taken over and used for unit operations, including the method of arriving at the compensation therefor.

(iv)A plan for maintaining effective supervision and conduct of unit operations, in

respect to which each working interest owner shall have a vote with a value corresponding to the percentage of unit expense chargeable against the interest of such owner.

(e)A non-refundable application fee in the amount of $2,500.

(2)Concurrently with the filing of the petition with the Department, the petitioner may file or cause to be filed, in the office of the recorder for the county or counties in which the affected lands sought to be unitized are located, a notice setting forth:

(a)The type of proceedings before the Department and a general statement of the purpose

of such proceedings.

(b)A legal description of the lands, oil and gas lease or leases, and other oil and gas

property interests, which may be affected by the proposed unitization.

(3)Upon the filing of such notice:

(a)All transfers of title to oil and gas rights shall thereafter be subject to the

final order of the Department in such proceedings, and

(b)Such notice shall be constructive notification to every person subsequently

acquiring an interest in or a lien on any of the property affected thereby, and every person whose interest or lien is not shown of record at the time of filing such notice shall, for the purpose of this Act, be deemed a subsequent purchaser and shall be bound by the proceedings before the Department to the same extent and in the same manner as if he were a party thereto.