40-13-303. Order establishing brine field unit.

845 words·~4 min read·/ut/title-40/chapter-13/40-13-303

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

Effective 5/7/2025

(a)The board may hold a hearing to consider the need for the operation as a unit of one or more brine reservoirs or parts of brine reservoirs in a field.

(b)The board shall consider including any state lands within a brine field unit that would not otherwise be protected from drainage because of the inability to develop the state lands due to geography or other factors.

(2)The board shall make an order providing for the unit operation of a reservoir or part of a reservoir, if the board finds that:

(a)the operation is reasonably necessary for the purposes of this chapter; and

(b)the value of the estimated additional recovery of brine substantially exceeds the estimated additional cost incident to conducting the operations.

(a)An order by the board establishing or modifying a brine field or brine field unit shall prescribe a plan for unit operations that shall include:

(i)a description of the lands and of the reservoir that is established as the brine field or brine field unit;

(ii)subject to Subsection (3)(b) , an allocation of the brine produced in the brine field unit to the separately-owned tracts in the brine field or brine field unit;

(iii)the method for apportioning costs of development and operation between the separately owned tracts and how these costs are paid including a provision providing a procedure for the unit production allocated to an owner who does not pay the share of the cost of unit operations charged to such owner, or the interest of that owner, to be sold and the brine proceeds applied to the payment of the costs;

(iv)a provision, if necessary, for carrying or otherwise financing a person who elects to be carried or otherwise financed, allowing a reasonable interest charge for this service payable out of that person's share of the production;

(v)the method and circumstances under which brine or effluent from the brine field unit may be injected into the reservoir or other formations;

(vi)the time when the unit operations shall commence, and the manner in which and the circumstances under which, the unit operations shall terminate;

(vii)the additional provisions that the board finds appropriate for carrying out the unit operations, and for the protection of correlative rights; and

(viii)the designation of a unit operator.

(i)The allocation under Subsection (3)(a)(ii) shall be in accord with the agreement, if any, of the interested parties.

(ii)If there is no agreement, the board shall determine the relative value, from evidence introduced at the hearing, of the separately owned tracts in the brine field unit area and the production allocated to each tract shall be the proportion that the relative value of each tract so determined bears to the relative value of all tracts in the brine field unit area.

(a)An order of the board providing for unit operations of a reservoir may not become effective unless and until:

(i)the plan for unit operations prescribed by the order has been approved in writing by:

(A)those owners who, under the board's order, will be required to pay 70% of the costs of the unit operation; and

(B)the owners of 70% of the production or brine proceeds that will be credited to interests that are free of costs, such as royalties, overriding royalties, and production payments; and

(ii)the board makes a finding, either in the order providing for unit operations or in a supplemental order, that the plan for unit operations has been so approved.

(b)If the persons owning required percentage of interest in a brine field unit area do not approve the plan for unit operations within six months from the date on which the order providing for unit operations is made, the order is ineffective and the board shall revoke the order unless good cause exists to extend the time.

(5)An order providing for unit operations may be amended by an order made by the board in the same manner and subject to the same conditions as an original order providing for unit operations.

(a)Operations, including the commencement, drilling, or operation of a brine well upon any portion of the brine field unit area is considered for all purposes the conduct of operations upon each separately owned tract in the brine field unit area by the several owners.

(b)The portions of the unit production allocated to a separately owned tract in a brine field unit area shall, when produced, be considered, for all purposes, to have been actually produced from the tract by a brine well drilled.

(7)Operations carried on under the plan of unitization shall constitute a fulfillment of all of the provisions of the brine leases or other contracts upon lands included within the brine field unit area insofar as the leases or contracts may relate to the reservoir or portion of the reservoir included within the brine field unit.

Enacted by Chapter 152 , 2025 General Session