NRS 522.085 Distribution of production; distribution in kind under certain circumstances.

270 words·~1 min read·/nv/chapter-522-oil-and-gas/522-085·

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

1. The amount of the unit production allocated to each separately owned tract within the unit, and only that amount, regardless of the well or wells in the unit area from which it may be produced and regardless of whether it be more or less than the amount of the production from the well or wells, if any, on any such separately owned tract, must be considered as production from the separately owned tract, and, except as may be otherwise authorized in this chapter, or in the plan of unitization approved by the Division, must be distributed among or the proceeds thereof paid to the several persons entitled to share in the production from the separately owned tract in the same manner, in the same proportions, and upon the same condition that they would have participated and shared in the production or proceeds thereof from such separately owned tract had not the unit been organized, and with the same legal effect.

2. If adequate provisions are made for the receipt thereof, the share of the unit production allocated to each separately owned tract must be delivered in kind to the persons entitled thereto by virtue of ownership of oil and gas rights therein or by purchase from the owners subject to the rights of the unit to withhold and sell it in payment of unit expense pursuant to the plan of unitization, and subject further to the call of the unit on such portions of the gas for operating purposes as may be provided in the plan of unitization.