353.510 Definitions for KRS 353.500 to 353.720.

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

As used in KRS 353.500 to 353.720, unless the context otherwise requires:

(1)"Department" means the Department for Natural Resources;

(2)"Commissioner" means the commissioner of the Department for Natural

Resources;

(3)"Director" means the director of the Division of Oil and Gas as provided in KRS

353.530;

(4)"Commission" means the Kentucky Oil and Gas Conservation Commission as

provided in KRS 353.565;

(5)"Person" means any natural person, corporation, association, partnership,

receiver, governmental agency subject to KRS 353.500 to 353.720, trustee,

so-called common-law or statutory trust, guardian, executor, administrator, or

fiduciary of any kind, federal agency, state agency, city, commission, political

subdivision of the Commonwealth, or any interstate body;

(6)"Correlative rights" means the reasonable opportunity of each person entitled

thereto to recover and receive or receive, without waste, the oil and gas in and

under or produced from a tract or tracts in which the person owns or controls

an interest, or proceeds thereof;

(7)"Oil" means natural crude oil or petroleum and other hydrocarbons, regardless

of gravity, which are produced at the well in liquid form by ordinary production

methods and which are not the result of condensation of gas after it leaves the

underground reservoir;

(8)"Gas" means all natural gas, including casinghead gas, and all other

hydrocarbons not defined in subsection

(7)of this section as oil;

(9)"Pool" means:

(a)An underground reservoir containing a common accumulation of oil or

gas or both; or

(b)An area established by the department or the commission as a pool.

Each productive zone of a general structure which is completely separated

from any other zone in the structure, or which for the purpose of KRS 353.500

to 353.720 may be so declared by the department, is covered by the word

"pool";

(10)"Field" means the general area which is underlaid or appears to be underlaid

by at least one

(1)pool; and "field" includes the underground reservoir

containing oil or gas or both. The words "field" and "pool" mean the same thing

when only one

(1)underground reservoir is involved; however, "field," unlike

"pool," may relate to two

(2)or more pools;

(11)"Just and equitable share of production" means, as to each person, an amount

of oil or gas or both substantially equal to the amount of recoverable oil and

gas in that part of a pool underlying his tract or tracts;

(12)"Abandoned," when used in connection with a well or hole, means a well or

hole which has never been used, or which, in the opinion of the department,

will no longer be used for the production of oil or gas or for the injection or

disposal of fluid therein;

(13)"Workable bed" means:

(a)A coal bed actually being operated commercially;

(b)A coal bed that the department decides can be operated commercially

and the operation of which can reasonably be expected to commence

within not more than ten

(10)years; or

(c)A coal bed which, from outcrop indications or other definite evidence,

proves to the satisfaction of the commissioner to be workable, and which,

when operated, will require protection if wells are drilled through it;

(14)"Well" means a borehole:

(a)Drilled or proposed to be drilled for the purpose of producing gas or oil;

(b)Through which gas or oil is being produced; or

(c)Drilled or proposed to be drilled for the purpose of injecting any water,

gas, or other fluid therein or into which any water, gas, or other fluid is

being injected;

(15)"Shallow well" means any well drilled and completed at a depth of six thousand

(6,000) feet or less except, in the case of any well drilled and completed east of

longitude line 84 degrees 30', shallow well means any well drilled and

completed at a depth of six thousand (6,000) feet or above the base of the

lowest member of the Devonian Brown Shale, whichever is the deeper in

depth;

(16)"Deep well" means any well drilled and completed below the depth of six

thousand (6,000) feet or, in case of a well located east of longitude line 84

degree 30', a well drilled and completed at a depth below six thousand (6,000)

feet or below the base of the lowest member of the Devonian Brown Shale,

whichever is deeper;

(17)"Operator" means:

(a)For a deep well, any owner of the right to develop, operate, and produce

oil and gas from a pool and to appropriate the oil and gas produced

therefrom, either for himself or for himself and others. In the event that

there is no oil and gas lease in existence with respect to the tract in

question, the owner of the oil and gas rights therein shall be considered

as the royalty owner to the extent of the prevailing royalty in the oil and

gas in that portion of the pool underlying the tract owned by the owner,

and as operator as to the remaining interest in such oil and gas. In the

event the oil is owned separately from the gas, the owner of the right to

develop, operate, and produce the substance being produced or sought

to be produced from the pool shall be considered as "operator" as to such

pool; and

(b)For a shallow well, any owner of the right to develop, operate, and

produce oil and gas from a pool and to appropriate the oil and gas

therefrom, either for himself or herself, or for himself or herself and others.

If there is no oil and gas lease in existence with respect to the tract in

question, the owner of the oil and gas rights therein shall be considered

as operator to the extent of seven-eighths (7/8) of the oil and gas in that

portion of the pool underlying the tract owned by the owner, and as a

royalty owner as to the one-eighth (1/8) interest in the oil and gas. If the

oil is owned separately from the gas, the owner of the right to develop,

operate, and produce the substance being produced or sought to be

produced from the pool shall be considered as operator as to the pool;

(18)"Royalty owner" means any owner of oil and gas in place, or oil and gas rights,

to the extent that the owner is not an operator as defined in subsection

(17)of

this section;

(19)"Drilling unit" generally means the maximum area in a pool which may be

drained efficiently by one

(1)well so as to produce the reasonable maximum oil

or gas reasonably recoverable in the area. Where the regulatory authority has

provided rules for the establishment of a drilling unit and an operator,

proceeding within the framework of the rules so prescribed, has taken the

action necessary to have a specified area established for production from a

well, the area shall be a drilling unit;

(20)"Underground source of drinking water" means those subsurface waters

identified as in regulations promulgated by the department which shall be

consistent with the definition of underground source of drinking water in

regulations promulgated by the Environmental Protection Agency pursuant to

the Safe Drinking Water Act, 42 U.S.C. secs. 300(f) et seq.;

(21)"Underground injection" means the subsurface emplacement of fluids by well

injection but does not include the underground injection of natural gas for

purposes of storage;

(22)"Endangerment of underground sources of drinking water" means underground

injection which may result in the presence in underground water, which

supplies or can reasonably be expected to supply any public water system, of

any contaminant and if the presence of the contaminant may result in the

system's not complying with any national primary drinking water regulation or

may otherwise adversely affect the health of persons;

(23)"Class II well" means wells which inject fluids:

(a)Which are brought to the surface in connection with conventional oil or

natural gas production and may be commingled with waste waters from

gas plants which are an integral part of production operations, unless

those waters are classified as a hazardous waste at the time of injection;

(b)For enhanced recovery of oil or natural gas; and

(c)For storage of hydrocarbons which are liquid at standard temperature and

pressure;

(24)"Fluid" means any material or substance which flows or moves whether in a

semisolid, liquid, sludge, gas, or any other form or state;

(25)"Horizontal well" means a well, the wellbore of which is initially drilled on a

vertical or directional plane and which is curved to become horizontal or nearly

horizontal, in order to parallel a particular geological formation and which may

include multiple horizontal or stacked laterals;

(26)"Vertical well" means a well, the wellbore of which is drilled on a vertical or

directional plane into a formation and is not turned or curved horizontally to

allow the wellbore additional access to the oil and gas reserves in the

formation;

(27)"Prevailing royalty" means the royalty rate or percentage that the department

or the commission determines is the royalty most commonly applicable with

regard to the tract or unit in the issue. The royalty rate set by the department or

the commission shall not be less than one-eighth (1/8) or twelve and one-half

percent (12.5%);

(28)"Best management practices" means demonstrated practices intended to

control site runoff and pollution of surface water and groundwater to prevent or

reduce the pollution of waters of the Commonwealth;

(29)"Abandoned storage tank facility" means any aboveground storage tank or

interconnected grouping of tanks that is no longer being actively used and

maintained in conjunction with the production and storage of crude oil or

produced water;

(30)"Spill prevention, control, and countermeasure structures" means containment

structures constructed around a storage facility to contain facility discharges;

(31)"Landowner" means any person who owns real property where an abandoned

storage tank facility is currently located;

(32)"Chemical Abstracts Service" means the division of the American Chemical

Society that is the globally recognized authority for information on chemical

substances;

(33)"Chemical abstracts service number" means the unique identification number

assigned to a chemical by the Chemical Abstracts Service;

(34)"Chemical" means any element, chemical compound, or mixture of elements or

compounds that has its own specific name or identity, such as a chemical

abstracts service number;

(35)"Chemical disclosure registry" means the chemical registry known as

FracFocus developed by the Groundwater Protection Council and the

Interstate Oil and Gas Compact Commission. If that registry becomes

permanently inoperable, the chemical disclosure registry shall mean another

publicly accessible Web site that is designated by the commissioner;

(36)"Division" means the Kentucky Division of Oil and Gas;

(37)"Emergency spill or discharge" means an uncontrolled release, spill, or

discharge associated with an oil or gas well or production facility that has an

immediate adverse impact to public health, safety, or the environment as

declared by the secretary of the cabinet;

(38)"Health professional" means a physician, physician assistant, nurse

practitioner, registered nurse, or emergency medical technician licensed by the

Commonwealth of Kentucky;

(39)"High-volume horizontal fracturing treatment" means the stimulated treatment

of a horizontal well by the pressurized application of more than eighty thousand

(80,000) gallons of water, chemical, and proppant, combined for any stage of

the treatment or three hundred twenty thousand (320,000) gallons in the

aggregate for the treatment used to initiate or propagate fractures in a

geological formation for the purpose of enhancing the extraction or production

of oil or natural gas;

(40)"Proppant" means sand or any natural or man-made material that is used in a

hydraulic fracturing treatment to prop open the artificially created or enhanced

fractures once the treatment is completed;

(41)"Total water volume" means the total quantity of water from all sources used in

a high-volume hydraulic fracturing treatment;

(42)"Trade secret" means information concerning the volume of a chemical or

relative concentration of chemicals used in a hydraulic fracturing treatment

that:

(a)Is known only to the hydraulic fracturing treatment's owners, employees,

former employees, or persons under contractual obligation to hold the

information in confidence;

(b)Has been perfected and appropriated by the exercise of individual

ingenuity which gives the hydraulic fracturing treatment's owner an

opportunity to retain or obtain an advantage over competitors who do not

know the information; and

(c)Is not required to be disclosed or otherwise made available to the public

under any federal or state law or administrative regulation;

(43)"Cabinet" means the Energy and Environment Cabinet;

(44)"Stratigraphic test well" means an exploratory borehole drilled for the sole

purpose of acquiring subsurface geological and structure test data;

(45)"Notice" means the sending of certified mail to the last known address. The

date of delivery shall be the earlier of the date shown on the certified mail

return receipt or the date thirty

(30)days after the date shown on the postal

service proof of mailing. For the purposes of KRS 353.620, 353.630, 353.640,

and 353.700, any unknown or nonlocatable owner shall be deemed to have

received notice, provided that the person giving the notice has caused to be

published, no more than thirty

(30)days prior to the submission of an

application or order issued pursuant to an application, one

(1)notice in the

newspaper of the largest circulation in each county in which any tract, or

portion thereof, affected or proposed to be affected, is located. The applicant

shall provide a copy of the published notification to the director within twenty

(20)days of the date of publication. The notice shall:

(a)State, as applicable, that an application is being filed with the division or

that an order has been issued pursuant to an application filed with the

division;

(b)Describe any tract, or portion thereof, affected or proposed to be affected;

(c)In the case of an unknown owner, identify the name of the last known

owner;

(d)In the case of a nonlocatable owner, identify the owner and the owner's

last known address; and

(e)State that any party claiming an interest in any tract, or portion thereof,

affected or proposed to be affected, shall contact the operator at the

published address;

(a)"Control person" means a person who:

1. Has the ability to commit the financial or real property assets or

working resources of an entity to comply with this chapter and the

administrative regulations promulgated hereunder with respect to

the operations of a well or the manner in which a well is operated;

2. Has any other relationship that gives that person authority to

determine the manner in which a well is operated, plugged, and

abandoned. This includes a rebuttable presumption that an ineligible

person is directing the actions of his or her spouse or child who files

an application;

3. Is an officer, director, or general partner of an entity; or

4. Has an ownership interest in an entity equaling or exceeding fifty

percent (50%), except that the cabinet may determine that a person

has controlling interest in an entity with less than fifty percent (50%)

ownership.

(b)Unless the person is determined to qualify under paragraph

(a)of this

subsection, "control person" does not include:

1. An independent third-party service company;

2. A contract operator;

3. A well tender or pumper;

4. The owner of a non-operated undivided working interest;

5. A limited partner;

6. A unitholder in a limited liability company; or

7. Any other person who by virtue of a joint operating agreement,

entity governance agreement, or other contractual relationship does

not have the right to control the manner in which a well is operated

and plugged and abandoned;

(47)"Eligible well" means:

(a)An orphan well; or

(b)Any abandoned well that poses an imminent threat to human health,

safety, or the environment; and

(48)"Orphan well" means any oil or gas well, as defined in subsection

(14)of this

section, which has been determined by the cabinet to be improperly

abandoned or improperly closed, and that has no known owner or operator

with continuing legal responsibility or all owners or operators with continuing

legal responsibility for the well are determined to be financially insolvent

following a reasonable investigation conducted by the cabinet.