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§ 570.8. Working interest owner's statement to operator--Nomination of gas for producing ow...

Oklahoma Statutes AnnotatedTitle 52. Oil and Gas

Oklahoma Statutes Annotated
Title 52. Oil and Gas (Refs & Annos)
Chapter 13A. Production Revenue Standards (Refs & Annos)
52 Okl.St.Ann. § 570.8
§ 570.8. Working interest owner's statement to operator--Nomination of gas for producing owner's account--Producing owner's report--Gas meter owner's statement--First purchaser's or shipper's statement--Records to be maintained--Operator's rights and remedies for noncompliance--Elections and notices--Other remedies
A. Within sixty (60) days after receiving a written request from the operator, each working interest owner in a well producing gas shall furnish or cause to be furnished to the operator a written statement showing the name, address, royalty interest, taxpayer identification number and payment status of owners of royalty interest to which such working interest is subject. Thereafter, each working interest owner shall furnish or cause to be furnished to the operator a written statement showing:
1. Changes in the above specified information within sixty (60) days of receipt of notification thereof; or
2. Changes in its working interests within sixty (60) days of the receipt of notice of the change.
B. Each producing owner of gas from a well shall provide to the operator no later than five (5) business days prior to the month in which the nomination is to be effective, but earlier if required by the first purchaser or transporter, the name of the first purchaser or shipper and the volumes of gas nominated for production for such producing owner's account. The term “shipper”, as used in this section, shall include any entity who contracts with a transporter to move gas through the transporter's system. The owner of the gas meter shall confirm all nominations with the operator of the well no later than the last business day prior to the month in which production occurs.
C. Within sixty (60) days after the end of the month of production, each producing owner shall report and account to the operator of the well, the identity of the first purchaser or shipper of the gas and the information specified in Section 570.12 of this title. Within thirty (30) days after receiving notice of any retroactive gas volume adjustment, each producing owner shall furnish, or cause to be furnished, notice of such retroactive adjustment to the operator of the well.
D. Within fifteen (15) days after the end of the month of production, each owner of a gas meter taking gas solely from a gathering system shall provide upon first request by the owner of such gathering system and thereafter, the gross volume of gas measured by such meter both in MCF and British Thermal Unit equivalent.
Within twenty (20) days after the end of the month of production, each owner of a gas meter shall provide or cause to be provided in writing to the operator of the well, the gross volume of gas measured by such meter, both in MCF and British Thermal Unit equivalent, and the volume of gas allocated at the meter to each first purchaser or shipper and each contracted producing owner that sold gas to the owner of the gas meter. Each meter owner shall, within the same time period, furnish each first purchaser or shipper the volume of gas allocated at the meter to that first purchaser or shipper. However, in the event a gas processing plant operator is performing the allocations, within ten (10) days after the end of the production month, the pipeline residue gas meter owner shall provide, upon first request by the processing plant operator and thereafter, the volume and British Thermal Unit equivalent measured through its meter as required by the gas processing plant operator for its allocations under this subsection.
The owner of a gas meter who has a gas contract, whether one or more, with one or more producing owners covering all of the gas flowing through its gas meter, may, as an alternative to supplying the operator with the information stated in this subsection, furnish monthly volume statements to the operator of the well, provided it has already furnished the operator with the names of the producing owners and the decimal interest owned by each such producing owner or any method other than by decimal interest then in effect for allocating gas among the producing owners. Thereafter, the owner of the gas meter shall only be required to supply the operator with changes to the name of a producing owner, the decimal interest owned by a producing owner or the method, other than by decimal interest, for allocating gas among the producing owners within thirty (30) days after receiving notice of such change.
Within thirty (30) days after receiving notice of any retroactive gas volume adjustment, each owner of a gas meter shall furnish notice of such retroactive adjustment to the operator of the well.
E. Within thirty-five (35) days after the end of the month of production each first purchaser or shipper of gas from a gas meter shall furnish or cause to be furnished to the operator of the well, a volume allocation statement showing the volume of gas purchased from or shipped for each contracted producing owner. Within thirty (30) days after making any retroactive gas volume adjustment for such well, the first purchaser or shipper shall furnish notice of such retroactive gas volume adjustment to the operator of the well.
F. Any owner of a gas meter, first purchaser, or any gas shipper that does not provide the information required under subsection D or E of this section shall subject the producing owner or owners contracted to such entity to the same remedies available to the operator under subsection H of this section, as if such producing owner or owners are in noncompliance with subsections A and C of this section.
G. For production occurring after August 31, 1992, each person distributing proceeds to a royalty interest owner shall maintain for a period of not less than five (5) years:
1. Copies of information furnished to the operator pursuant to the Production Revenue Standards Act; and
2. A record of receipts and payments of proceeds which have occurred pursuant to the Production Revenue Standards Act.
Such records shall be available for inspection upon reasonable notice by any affected royalty interest owner in the well.
H. The Production Revenue Standards Act shall not supersede or limit the operator's right to control gas nominations and allocations pursuant to the provisions of any joint operating agreement, gas balancing agreement or other agreement then in effect between the operator of the well and any producing owner, or any order of the Oklahoma Corporation Commission. If the operator of the well is not provided with the information set forth in subsections A and C of this section within the sixty-day period set forth in each said subsection, the operator of the well shall have the right, but not the obligation, to confirm zero volume of gas sales for such noncomplying producing owner and to make available for nomination and sale to the producing owners in the well then in compliance with the provisions of subsections A and C of this section, all of the noncomplying producing owner's share of production for the next subsequent calendar month of production and for each and every month thereafter during which such producing owner is in noncompliance with provisions of subsections A and C of this section. If the operator elects to make the noncomplying producing owner's share of production available for nomination and sale, the operator shall immediately notify the noncomplying producing owner, by certified mail, that it shall no longer have the right to nominate any volume of gas until it is in compliance with the provisions of subsections A and C of this section, or its first purchaser, shipper or owner of the gas meter are in compliance with subsections D and E of this section. Such notice shall contain the following information:
1. Lease or well identification;
2. Legal location; and
3. Production months of noncompliance with subsections A, C, D or E of this section.
The operator shall then immediately notify each producing owner then in compliance with subsections A and C of this section that additional gas may be available for nomination and sale. The operator shall also immediately notify in writing the noncomplying producing owner's first purchaser or shipper and the owner of the gas meter that the producing owner, first purchaser, shipper or owner of the gas meter is in noncompliance with the provisions of subsections A, C, D or E of this section and thus does not have the right to nominate and sell or transport any volume of gas until it is in compliance with this section.
The first purchaser or shipper and the owner of the gas meter shall be entitled to rely on and shall incorporate on a prospective basis any nomination or allocation changes pursuant to such notification from the operator under this section. Changes pursuant to such notification can be made on a retroactive basis if so agreed to by the operator, owner of the meter, and first purchaser or shipper.
As soon as a noncomplying party is in compliance with the provisions of this section, but no sooner than the next production month unless otherwise agreed to, the operator of the well shall give the affected producing owner the opportunity to nominate and sell gas subject to existing agreements or by common practice within the oil and gas industry.
Any noncomplying party that disagrees with the information contained in the operator's written notice required under this subsection shall have the right to challenge the operator's actions pursuant to the provisions of subsection J of this section.
I. All elections and notices given pursuant to the provisions of the Production Revenue Standards Act shall become effective as of the first day of the month following the end of any time period specified in the Production Revenue Standards Act.
J. The remedies provided for in this section shall not preclude any party from pursuing the remedies available to it through the district courts, as provided by existing law, including the right to offset.
K. Nothing contained in the Natural Gas Market Sharing Act1 shall change the obligations of a purchaser under an existing gas contract unless otherwise agreed to by the parties.

Credits

Laws 1992, c. 190, § 8, eff. Sept. 1, 1992; Laws 1993, c. 340, § 2, emerg. eff. June 9, 1993.

Footnotes

Title 52, § 581.1 et seq.
52 Okl. St. Ann. § 570.8, OK ST T. 52 § 570.8
Current with legislation of the Second Regular Session and First and Second Extraordinary Sessions of the 58th Legislature (2022).
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