Unit OperationDefinitions
Section § 3635
This section indicates that the definitions provided in this article are used to understand and interpret the entire chapter, unless specified otherwise.
Section § 3635.1
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.
Section § 3635.2
This law clarifies that the term "land" includes both the surface of the land and any mineral rights beneath it.
Section § 3635.3
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.
Section § 3635.4
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.
Section § 3635.5
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.
Section § 3636
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.
Section § 3636.1
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.
Section § 3636.2
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.
Section § 3636.3
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.
Section § 3637
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.
Section § 3637.1
The term "working interest owner" refers to an individual or entity that owns a working interest in a property or business venture.
Section § 3637.2
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.
Section § 3637.3
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.