Oklahoma Administrative Code › Title 165 - Corporation Commission › Chapter 10 - Oil And Gas Conservation › Subchapter 27 - Production Revenue Standards › Section 165:10-27-8 - Operator's option to confirm zero volume of gas sales because of noncompliance

Current through Vol. 41, No. 20, July 1, 2024
(a)
				If a producing owner fails to timely provide the operator of the well with any
				of the information required by
				165:10-27-4
				and
				165:10-27-7, or
				if the owner of a gas meter, first purchaser or shipper of gas fails to timely
				provide the operator of the well with any of the information required of it by
				165:10-27-7 for
				the transfer, transportation, delivery or sale of gas by a producing owner, the
				operator of the well shall have the right, but not the obligation, to confirm
				zero volume of gas sales for such producing owner, and to make available for
				nomination and sale to other producing owners in the well, then in compliance
				with said Sections, all of such producing owner's share of production for the
				next subsequent calendar month and for each and every month thereafter of
				noncompliance. If the operator elects to make such producing owner's share of
				production available for nomination and sale, the operator shall immediately
				notify such producing owner by certified mail and inform such producing owner
				that such producing owner shall no longer have the right to nominate any volume
				of gas, until the next production month following the date of compliance,
				unless the operator of the well agrees to an earlier date. Such notice shall
				contain the lease or well identification, legal description, production months
				of noncompliance, a brief description of the noncompliance, and a provision
				stating that the operator is confirming zero volume of gas sales for such
				producing owner. The operator shall than immediately notify each producing
				owner then in compliance with the aforesaid Sections and inform said producing
				owner about additional gas volumes available for nomination and sale. In regard
				to the producing owner for which the operator has confirmed zero gas sales, the
				operator shall also immediately notify in writing such producing owner's first
				purchaser or shipper, and the owner of the gas meter, and such notice shall
				report that such producing owner does not have the right to nominate and sell
				or transport any volume of gas, until the next production month following
				compliance, unless the operator of the well agrees to an earlier date. Such
				notice shall also contain the lease or well identification, legal description,
				a brief description of the noncompliance, and the production months of
				noncompliance.
(b) As soon as a
				noncomplying party is in compliance, 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.
(c) 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 may be made on a retroactive basis if so agreed
				to by the operator, owner of the meter, the first purchaser or
				shipper.
(d) 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 of offset.
(e)
				All elections and notices given pursuant to the provisions of this Subchapter
				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 as last
				amended, 52 O.S. Section
				570.1, et
				seq.
Added at 10 Ok Reg 2601,
				  eff 6-25-93; Amended at 11 Ok Reg 3699, eff
				  7-11-94