Oklahoma Administrative Code › Title 165 - Corporation Commission › Chapter 10 - Oil And Gas Conservation › Subchapter 27 - Production Revenue Standards › Section 165:10-27-3 - Definitions

Current through Vol. 41, No. 20, July 1, 2024
The following words or terms, when used in this Subchapter,
				  shall have the following meaning, unless the context clearly indicates
				  otherwise.
"Owner"
means a person or governmental entity
				  with a legal interest in the mineral acreage under a well which entitles that
				  person or entity to oil or gas production or the proceeds or revenues
				  therefrom.
"Produce", "producing"
and
"production"
mean the physical act of severance of oil and gas
				  from a well by an owner and includes but is not limited to the sale or other
				  disposition thereof.
"Producing owner"
means an owner entitled to
				  produce who during a given month produces oil or gas for its own account or the
				  account of subsequently created interests as they burden its interest.
"Proportionate production interest"
means that
				  interest in production which a working interest owner is entitled to produce in
				  order to adjust for shifting of royalty burdens among working interest owners
				  under the royalty provisions of 52 O.S. Sections
				  570.1, et
				  seq., and is equal to the quotient of:
(A) the sum of a working interest owner's net revenue
				  interest plus the net revenue interests of any subsequently created interests
				  as they burden such owner's working interest,
(B) divided by the remainder of one (1) less the royalty
				  share.
"Proportionate royalty share"
means the
				  percentage of the royalty share owned by a royalty interest owner calculated by
				  dividing such owner's royalty interest in a well by the royalty share.
"Royalty interest"
means the entirety of the
				  percentage interest in production or proceeds therefrom:
(A) reserved or granted by a mineral interest owner exclusive
				  of any interest defined as a working interest or a subsequently created
				  interest, or
(B) otherwise provided or ascribed to a mineral interest
				  owner by statute, rule, order or operation of law.
"Royalty interest in a well"
means an owner's
				  royalty interest multiplied by the quotient of:
(A) the gross mineral acres under the well attributable to
				  such interest, divided by
(B) the total mineral acres under the well.
"Royalty proceeds"
means the share of proceeds
				  or other revenue derived from or attributable to any production of oil and gas
				  attributable to the royalty share, but shall not include payments of bonus,
				  delay rentals, shut-in royalties or any additional royalty payable to the
				  Commissioners of the Land Office or other governmental entity, pursuant to and
				  valued according to the terms of its oil and gas lease, which is calculated
				  separately from the royalty portion of actual proceeds from the sale of oil or
				  gas.
"Royalty share"
means the percentage of the well
				  equal to the sum of all royalty interests in the well.
"Share of production"
means the monthly
				  entitlement to produce belonging to a producing owner.
"Shipper"
means any entity who contracts with a
				  transporter to move gas through the transporter's system.
"Subsequently created interest"
means any
				  interest carved from a working interest other than a royalty interest. In
				  addition to the royalty interest contained in a lease, a non-participatory
				  interest created by a working interest owner for the benefit of a mineral
				  interest owner in excess of a one-eighth (1/8) royalty interest may, by
				  separate agreement other than the oil and gas lease, be a subsequently created
				  interest and thereby not be communitized under the terms of the Production
				  Revenue Standards Act only if there is clear and unambiguous language
				  expressing that intent in the creating document. The additional royalty payable
				  to the Commissioners of the Land Office or other governmental entity pursuant
				  to and valued according to the terms of its oil and gas lease, which is
				  calculated separately from the sale of oil or gas, shall also be a subsequently
				  created interest and thereby shall not be communitized under 52 O.S. Section
				  570.1, et
				  seq.
"Well"
means an oil or gas well, and shall
				  include:
(A) a well having uniform ownership as to all producing
				  zones, or
(B) a drilling and spacing unit having uniform ownership
				  wherein multiple wells producing gas are commonly metered, and
(C) each separately metered producing zone within a single
				  wellbore wherein ownership varies by zone.
"Working interest"
means the interest in a well
				  entitling the owner thereof to drill for an produce oil and gas, including but
				  not limited to the interest of a participating mineral owner to the extent set
				  forth in Section
				  87.1
				  of Title 52 of the Oklahoma Statutes.
Added at 10 Ok Reg 2601,
				  eff 6-25-93; Amended at 11 Ok Reg 3699, eff
				  7-11-94