(a) Application for production agreement. A proposed unit agreement
for geothermal energy and related resources shall set out:
(1) The total acreage in the unit, the number of state acres
in the unit, and number of privately owned acres in the unit;
(2) A listing of the leases included within the proposed unit
and recording information for such leases in the public records;
(3) A plat outlining the entire unit and showing in red the
state acreage included in the unit;
(4) How production is to be allocated to each lease; and
(5) For each state lease, the state's royalty interest and
any costs or deductions allowed against that interest.
(b) Approval of unit agreement.
(1) Any unit agreement that proposes to commit royalty interests
in PSF lands or state agency lands shall be submitted to the GLO pooling committee
for examination, investigation, and presentation to the SLB or the appropriate
board for lease.
(2) Upon determination by the SLB that the unit agreement applied
for is in the best interests of the state, the unitization will be approved.
(3) Any unit agreement that covers lands leased under §155.44
of this title (relating to Mining Leases on Relinquishment Act Lands) shall
be executed by the surface owner before consideration by the SLB. Any such
unit agreement must be approved by the SLB under this section before it is
effective.
(4) Any unit agreement that proposes to commit royalty interests
in state lands or areas other than PSF lands must be approved by the appropriate
board for lease and must be found to be in the best interests of the state.
(c) Provisions of unit agreement. A unit agreement may contain
the following provisions:
(1) That operations incident to the drilling of a well upon
any portion of the unit shall be deemed for all purposes to be the conduct
of such operations upon each tract in the unit;
(2) That the production allocated by the agreement to each
tract included in a unit shall, when produced, be deemed for all purposes
to have been produced from such tract;
(3) That the state's royalty interest shall be paid only on
that portion of the production from the unit which is allocated to the tract
in accordance with the agreement;
(4) That each lease included in the unit shall remain in effect
so long as the agreement remains in effect, and that upon termination of the
agreement each lease shall thereafter continue in effect under its own terms
and provisions;
(5) Such other terms, conditions, and provisions as may be
deemed to be in the best interest of the state.
(d) Rule of construction. No term, condition, or provision
of an approved unit agreement shall be read to burden an interest of the state
with any cost, liability, or be read to otherwise adversely impact upon the
state's interest unless such burden or adverse impact was expressly raised
before and approved by the SLB or appropriate board for lease.
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