Section § 3635

Explanation

This section indicates that the definitions provided in this article are used to understand and interpret the entire chapter, unless specified otherwise.

Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.

Section § 3635.1

Explanation

This section defines the term "person" to include a wide range of individuals and entities, such as corporations, associations, partnerships, and government bodies. It means that when the law mentions "person," it refers not just to individual humans but also to various organizations and even government entities.

“Person” means any natural person, corporation, association, partnership, limited liability company, joint venture, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind and includes the state and any city, county, city and county, district or any department, agency, or instrumentality of the state or of any governmental subdivision whatsoever.

Section § 3635.2

Explanation

This law clarifies that the term "land" includes both the surface of the land and any mineral rights beneath it.

“Land” means both surface and mineral rights.

Section § 3635.3

Explanation

In this context, a "pool" is defined as an underground area that holds or seems to hold crude oil or natural gas. Each distinct layer or zone within a geological structure, which doesn't mix with other layers, is considered a separate pool.

“Pool” means an underground reservoir containing, or appearing at the time of determination to contain, a common accumulation of crude petroleum oil or natural gas or both. Each zone of a general structure which is separated from any other zone in the structure is a separate pool.

Section § 3635.4

Explanation

The term "field" refers to a broad land area that is situated over or seems to be over one or more pools of a natural resource, like oil or gas.

“Field” means the same general surface area which is underlaid or reasonably appears to be underlaid by one or more pools.

Section § 3635.5

Explanation

This law defines what is meant by "tracts of land" in specific contexts. These are areas of land under separate ownership that must meet three conditions: they must be touching each other either above or below ground, be part of a field that's been producing for over 20 years, and be located in a field where more than 75 percent of it is within incorporated (officially organized) areas.

“Tracts of land” means land areas under separate ownership which are all of the following:
(a)CA Public Resources Code § 3635.5(a) Contiguous either on the surface or in the subsurface.
(b)CA Public Resources Code § 3635.5(b) Located within a field which has been producing for more than 20 years.
(c)CA Public Resources Code § 3635.5(c) Located within a field over 75 percent of which lies within incorporated areas.

Section § 3636

Explanation

This section defines what 'unit agreement' and 'unit operating agreement' mean. A 'unit agreement' includes any consent agreement related to a unit agreement for managing land or resources, but it does not include preliminary agreements for land interest exchanges. A 'unit operating agreement' is a specific agreement among the working interest owners that outlines how they will manage and operate activities related to the production of shared resources.

“Unit agreement” means and includes, in addition to the unit agreement entered into pursuant to the provisions of Article 3 (commencing with Section 3640) of this chapter, any consent agreement or other agreement entered into in connection with, and supplemental to, such unit agreement, but does not include a unit operating agreement or any preliminary agreement confined to effectuating any exchange of interests in land which the parties to such preliminary agreement may desire. “Unit operating agreement” means an agreement, entered into by the working interest owners only, governing all operations performed by the unit operator pursuant to the unit agreement and the unit operating agreement for the production of unitized substances.

Section § 3636.1

Explanation

A 'unit area' refers to the land encompassed within a specific agreement, called a unit agreement, which is made according to certain rules starting from Section 3640 of this chapter.

“Unit area” means all lands included within an area subject to a unit agreement entered into pursuant to the provisions of Article 3 (commencing with Section 3640) of this chapter.

Section § 3636.2

Explanation

This section defines 'unit production' as all substances like oil and gas that are extracted from a specific area, starting from the date when a certain type of agreement is approved.

“Unit production” means all oil, gas, and other hydrocarbon substances produced from a unit area from the effective date of a unit agreement approved by the supervisor pursuant to Section 3643.

Section § 3636.3

Explanation

The term “unit operator” refers to the person or people chosen by the owners who have a financial stake in the operations as the ones to manage the unit area.

“Unit operator” means the person or persons designated by the working interest owners as operator or operators of the unit area.

Section § 3637

Explanation

This law explains what a 'working interest' is in the context of oil and gas. It refers to the rights of someone who owns land or a lease, allowing them to drill for and produce oil and gas. Even if the owner delegates the actual drilling work to another party through various agreements, they still hold the working interest.

“Working interest” means an interest held in lands by virtue of fee title, including lands held in trust, a lease, operating agreement, or otherwise, under which the owner of such interest has the right to drill for, develop, and produce oil and gas. A working interest shall be deemed vested in the owner thereof even though his right to drill or produce may be delegated to an operator under a drilling and operating agreement, unit agreement, or other type of operating agreement.

Section § 3637.1

Explanation

The term "working interest owner" refers to an individual or entity that owns a working interest in a property or business venture.

“Working interest owner” means a person owning a working interest.

Section § 3637.2

Explanation

A 'royalty interest' refers to the right to receive a portion of the oil and gas produced from a property, or from the proceeds of their first sale, without having to bear any production costs. It excludes any involvement in the operation or development of the oil and gas source.

“Royalty interest” means a right to or interest in oil and gas produced from any lands or in the proceeds of the first sale thereof other than a working interest.

Section § 3637.3

Explanation

A 'royalty interest owner' is simply anyone who owns a royalty interest, which usually means they have the right to receive a portion of the revenue from the production of minerals or other resources.

“Royalty interest owner” means a person owning a royalty interest.