27-505. Pooling of interests
A. When two or more separately owned tracts of land are embraced within an established drilling unit, persons owning the drilling rights therein and the right to share in the production therefrom may agree to pool their interests and develop their lands as a drilling unit. If the persons do not agree to pool their interests, the commissioner may, for prevention of waste, for protection of correlative rights, or to avoid drilling of unnecessary wells, enter an order pooling and integrating their interests for the development of their lands as a drilling unit. Orders effectuating such pooling shall be made after notice and hearing, and shall be upon terms and conditions which will afford the owner of each tract the opportunity to recover or receive his just and equitable share of the oil and gas in the pool without unnecessary expense. Operations incident to drilling a well upon any portion of a unit covered by a pooling order shall be deemed for all purposes to be the conduct of such operations upon each separately owned tract in the unit by the several owners thereof. The portion of the production allocated to the owner of each tract included in a drilling unit formed by a pooling order shall, when produced, be considered as if it had been produced from the tract by a well drilled thereon. If such pooling is effectuated, the cost of development and operation of the pooled unit chargeable by the operator to other interested owners shall be limited to the actual and reasonable expenditures required for that purpose, including a reasonable charge for supervision. As to owners who refuse to agree upon pooling, the order shall provide for reimbursement for costs chargeable to each such owner out of, and only out of, production from the unit belonging to such owner. In event of dispute relative to such costs, the commissioner shall upon notice to all interested parties and hearing thereon, determine the proper costs. Appeals may be taken from the determination as from any other order of the commissioner. If one or more of the owners drills and operates, or pays the expense of drilling and operating the well for the benefit of others, then, in addition to any other rights conferred by the pooling order, the owner or owners so drilling or operating shall have a lien on the share of production from the unit accruing to the interest of each of the other owners for the payment of his proportionate share of the expenses. All the oil and gas subject to the lien, or so much thereof as necessary, shall be marketed and sold by the creditor and the proceeds applied in payment of the expenses secured by the lien, with the balance if any payable to the debtor.
B. The commissioner shall, in all instances where a unit has been formed from lands or areas of more than one ownership, require the operator, upon request of an owner, but subject to the right of the operator to market production and collect the proceeds with respect to an owner in default, as provided in subsection A, to deliver to the owner or his assigns his proportionate share of the production from the well common to the drilling unit. The owner receiving his share shall provide at his own expense proper receptacles for the receipt and storage thereof.
C. If the persons owning and drilling or exercising other rights in separate tracts embraced within a drilling unit fail to agree upon the pooling of the tracts and drilling of a well on the unit, and if the commissioner is without authority to require pooling as provided by this section, then, subject to all other applicable provisions of this article, the owner of each tract embraced within the drilling unit may drill on his tract, but the allowable production from the tract shall be the proportion of the allowable production for the full drilling unit as the area of such separately owned tract bears to the full drilling unit.
D. An agreement for repressuring or pressure-maintenance operations, cycling or recycling operations, including extraction and separation of liquid hydrocarbons from natural gas in connection therewith, or for carrying on any other method of unit or cooperative development or operation of a field or pool or a part of either, is authorized and may be performed, and shall not be held or construed to violate any statutes of this state relating to trusts, monopolies or contracts and combinations in restraint of trade, if, after notice and a public hearing, the agreement is approved by the commissioner as being in the public interest, protective of correlative rights, and reasonably necessary to increase ultimate recovery or to prevent waste of oil or gas. The agreements shall bind only the persons who execute them, and their heirs, successors, assigns, and legal representatives.
Structure Arizona Revised Statutes
Title 27 - Minerals, Oil and Gas
§ 27-102 - Arizona geological survey; state geologist; powers
§ 27-103 - Objectives of Arizona geological survey
§ 27-107 - Powers and duties; fund
§ 27-108 - Publications; deposit
§ 27-110 - Trade secrets; confidentiality; definition
§ 27-123 - Education and training fees
§ 27-124 - Mine inspections required; powers of inspector
§ 27-126 - Annual report to governor
§ 27-128 - Inspection of mines; violation; classification
§ 27-129 - Locating abandoned mines; public education; donor immunity
§ 27-131 - Abandoned mines safety fund; annual report
§ 27-201 - Location of mining claim upon discovery of mineral in place
§ 27-202 - Method of locating a lode claim; monument; location notice; amendments
§ 27-204 - Monumenting lode claims
§ 27-205 - Locating and monumenting placer and millsite claims
§ 27-208 - Affidavit of annual work; affidavit of claim maintenance fee payment; fees
§ 27-209 - Sufficiency of description of mining claims
§ 27-222 - Acknowledgment of contribution by delinquent co-owner
§ 27-231 - Definition of mineral
§ 27-233 - Preferred right to renew mineral lease; evaluation of geologic and economic evidence
§ 27-234 - Rent; royalty; appeal; interest; penalty; lien
§ 27-235 - Offering permits and leases at auction; terms of lease; financial security termination
§ 27-236 - Suspension of royalty rights
§ 27-237 - Review by commissioner
§ 27-239 - Inspections, investigations and audits
§ 27-251 - Application for mineral exploration permit
§ 27-252 - Terms of mineral exploration permit; definition
§ 27-271 - Definition of common variety minerals
§ 27-271.01 - Inventory of trust land containing common mineral products, materials and property
§ 27-272 - Common variety mineral leases; terms and conditions; rules
§ 27-273 - Performance and reclamation bonds
§ 27-274 - Trade secrets; confidentiality; definition
§ 27-302 - Operations subject to chapter; enforcement by inspector; violation; classification
§ 27-303 - Notification to inspector of beginning or suspending operations
§ 27-304 - Operator responsibility
§ 27-305 - Employee responsibility
§ 27-306 - First aid; inspectors as qualified instructors
§ 27-308 - Complaint to inspector of dangerous conditions by employee; inspection
§ 27-309 - Reports of fatal accidents to inspector; investigation
§ 27-310 - Copy of law available for inspection
§ 27-311 - Fire prevention and protection
§ 27-314 - Electrical installations
§ 27-315 - Unauthorized persons
§ 27-316 - Intoxicating liquors and drugs
§ 27-317 - Waste dumps and tailings areas; signs; violation; classification
§ 27-321 - Explosives; records; inspection
§ 27-322 - Explosives; marking; utilization and storage
§ 27-323 - Explosives; rules and regulations; access to operations
§ 27-343 - Structures over mine outlet
§ 27-347 - Construction of ladder-ways
§ 27-349 - Tracks and roadbeds; maintenance underground
§ 27-350 - Lights; trolley wires
§ 27-351 - Hoists; operator; indicator
§ 27-352 - Inspection and construction of hoists
§ 27-353 - Safety cage and catches
§ 27-354 - Cross-heads; buckets
§ 27-355 - Hoisting tools and materials
§ 27-356 - Protection from falling materials
§ 27-357 - Hoist release signal
§ 27-358 - Signaling apparatus
§ 27-360 - Precautions against flooding
§ 27-361 - Common system of drainage; contribution of cost
§ 27-362 - Order for inspection
§ 27-363 - Danger signals; visitors
§ 27-364 - Interfering with equipment
§ 27-365 - Regulation of underground use of internal combustion engines
§ 27-366 - Maps of underground workings
§ 27-367 - Maintenance and use of loading equipment
§ 27-368 - Ventilation; condition of airways; testing
§ 27-369 - Evacuation; procedure; routes
§ 27-372 - Uranium operations; testing for radon daughters
§ 27-423 - Tracks, roadbeds and roadways
§ 27-424 - Operation of heavy equipment
§ 27-425 - Open pits; fencing or blocking
§ 27-442 - Aggregate mining operations; community notice; application
§ 27-443 - Application fee; aggregate community notice fund
§ 27-444 - Community notice; public meeting
§ 27-445 - Approval of community notice or major modification
§ 27-446 - Claims of deviation from an approved community notice
§ 27-447 - Inspection and enforcement
§ 27-448 - Sand and gravel safety rules
§ 27-462 - Administration by inspector; rules and regulations
§ 27-464 - Notice of proposed adoption of rule
§ 27-469 - Exceptions to rules and regulations
§ 27-502 - Declaration of policy
§ 27-503 - Waste of oil or gas prohibited; powers of commissioner to prevent waste
§ 27-504 - Drilling units; rules and regulations; exceptions
§ 27-505 - Pooling of interests
§ 27-506 - Regulation of drilling in pools; notice of sale, transfer or purchase
§ 27-508.01 - Common purchaser of gas; duties; ratable taking; discrimination prohibited
§ 27-509 - Certificate of compliance
§ 27-510 - Certificate of clearance
§ 27-511 - Confiscation proceedings
§ 27-512 - Sale of illegal oil or gas or illegal products
§ 27-513 - Permit to drill well
§ 27-513.01 - Appointment by drilling permittee of attorney upon whom to serve process
§ 27-514 - Commission; appointment; terms; compensation
§ 27-515 - Administration; powers of the commission; fees
§ 27-517 - Hearings; reporter; fees
§ 27-519 - Refusal to obey subpoena
§ 27-520 - Judicial review; procedures
§ 27-521 - Duties of attorney general
§ 27-523 - Deposit of monies; expenses
§ 27-525 - Injunctions and restraining orders
§ 27-527 - Violation; classification
§ 27-531 - Integration of interests and spacing units
§ 27-532 - Order; units and unit areas; plan of unitization
§ 27-533 - Ratification or approval of plan by lessees and owners
§ 27-535 - Status and powers of unit; liability and expenses; lien
§ 27-537 - Enlargement of area; creation of new units; amendment of plan
§ 27-539 - Validation of unit agreements
§ 27-552 - Rules and regulations
§ 27-553 - Leasing state lands for oil and gas
§ 27-554 - Designation of known geological structures of producing oil and gas fields
§ 27-555.01 - Extension of lease due to lack of transportation, processing facilities or market
§ 27-557 - Unit operations; unit agreements
§ 27-559 - Development of water for use in operations; taking over well which yields fresh water
§ 27-560 - Surface use by lessee; liability for damages; bond; appraisal of damages; appeal
§ 27-561 - Assignment of lease; recording
§ 27-563 - Payment of noncompetitive lease royalties in kind or cash
§ 27-564 - Receipt and sale of royalty oil
§ 27-565 - Application to purchase royalty oil
§ 27-566 - Notice to lessee of election; storage
§ 27-567 - Sales of royalty oil
§ 27-568 - Delivery of oil to purchaser
§ 27-569 - Prohibitions on resale
§ 27-570 - Bond and penalties; waiver
§ 27-571 - Inspecting well records; trade secrets; confidentiality; definition
§ 27-601 - Authorization to enter compact
§ 27-602 - Extension of expiration date
§ 27-603 - Official representative
§ 27-652 - Supervision by commission
§ 27-653 - Information; filing; confidentiality
§ 27-654 - Drilling bond; amount; responsibility
§ 27-655 - Commission approval prior to operation; information; hearing
§ 27-656 - Rules and orders; hearing
§ 27-658 - Notice of sale or conveyance of well or land
§ 27-659 - Application to drill
§ 27-660 - Safety requirements
§ 27-661 - Drilling record; samples
§ 27-663 - Unlawful interference; classification
§ 27-664 - Cooperative development agreements; unitization
§ 27-665 - Unitization; requirements
§ 27-667 - Relationship of geothermal resources to water laws
§ 27-668 - Leasing state lands for development of geothermal resources
§ 27-669 - Designation of known geothermal resource areas
§ 27-671 - Provisions of lease
§ 27-672 - Unit operations; unit agreements
§ 27-673 - Surface use by lessee; liability for damages; bond; appraisal of damages; appeal
§ 27-674 - Assignment of lease; recording
§ 27-676 - Enjoining violations
§ 27-677 - Violation; civil penalty
§ 27-902 - Division of mined land reclamation; coordination of programs and activities
§ 27-904 - Rules; contributions
§ 27-905 - Certificate of disclosure of violations; remedies; definition
§ 27-921 - Surface disturbances created by new exploration operation or mining unit
§ 27-923 - Creating surface disturbances of five acres or less
§ 27-924 - Inactive mining units
§ 27-925 - Remedial response to emergencies and governmental orders
§ 27-926 - Initiation, extension and completion of reclamation
§ 27-927 - Substantial changes to approved reclamation plan; fee
§ 27-928 - Transferring an approved reclamation plan
§ 27-929 - Notice of plan or substantial change
§ 27-930 - Public disclosure of information; definition
§ 27-932 - Coordination with other governmental agencies
§ 27-934 - Plan submission fee; accounting and appropriation of revenues
§ 27-935 - Plan review and evaluation by private consultants
§ 27-1221 - Surface disturbances created by new exploration operation or aggregate mining unit
§ 27-1223 - Creating surface disturbances of five acres or less
§ 27-1224 - Inactive aggregate mining units
§ 27-1225 - Remedial response to governmental orders
§ 27-1226 - Initiation, extension and completion of reclamation
§ 27-1227 - Substantial changes to approved reclamation plan
§ 27-1228 - Transferring an approved reclamation plan
§ 27-1230 - Notice of plan for existing exploration operations and existing aggregate mining units
§ 27-1231 - Public disclosure of information; definition
§ 27-1232 - Coordination with other governmental agencies
§ 27-1233 - Fees; plan submissions; substantial changes; aggregate mining reclamation fund
§ 27-1234 - Plan review and evaluation by private consultants
§ 27-1236 - Licensing time frames
§ 27-951 - Submission and contents of reclamation plan
§ 27-952 - Notice of complete, incomplete or denied plan
§ 27-954 - Beginning new exploration operations
§ 27-1251 - Submission and contents of reclamation plan
§ 27-1252 - Notice of complete, incomplete or denied plan
§ 27-1253 - Approval; criteria
§ 27-1254 - Beginning new exploration operations
§ 27-971 - Submission and contents of reclamation plan
§ 27-972 - Notice of complete, incomplete or denied plan
§ 27-974 - Preservation and conservation of soil; exceptions
§ 27-976 - Beginning new mining units
§ 27-991 - Financial assurance requirements; form
§ 27-992 - Mining unit or existing exploration operation
§ 27-993 - New exploration operation
§ 27-994 - Duplication of financial assurance not required
§ 27-995 - Incremental financial assurance
§ 27-996 - Release of financial assurance
§ 27-997 - Rules; release, forfeiture or exercise of financial assurance
§ 27-1291 - Financial assurance requirements; form
§ 27-1292 - Aggregate mining unit or existing exploration operation
§ 27-1293 - New exploration operation
§ 27-1294 - Duplication of financial assurance not required
§ 27-1295 - Incremental financial assurance
§ 27-1296 - Release of financial assurance
§ 27-1297 - Rules; release, forfeiture or exercise of financial assurance
§ 27-1023 - Enforcement action on reclamation plan approval
§ 27-1024 - Injunctive relief; civil penalties
§ 27-1025 - Agency order; appeal
§ 27-1026 - Violation; classification
§ 27-1323 - Enforcement action on reclamation plan approval
§ 27-1324 - Injunctive relief; civil penalties
§ 27-1325 - Agency order; appeal
§ 27-1326 - Violation; classification
§ 27-1327 - Procurement; aggregate materials; eligibility
§ 27-1202 - Coordination of programs and activities
§ 27-1203.01 - Exemption for limited, intermittent-use projects
§ 27-1204 - Rules; contributions
§ 27-1205 - Certificate of disclosure of violations; remedies; definition
§ 27-1271 - Submission and contents of reclamation plan
§ 27-1272 - Notice of complete, incomplete or denied plan
§ 27-1273 - Approval; criteria
§ 27-1274 - Preservation and conservation of soil; exceptions