Ohio § 1509.28

§ 1509.28.

(A)(1) A person who has obtained the consent of the owners of at least sixty-five per cent

of the land area overlying a pool or a part of a pool may submit an application for

the operation as a unit of the entire pool or part of the pool to the chief of the

division of oil and gas resources management.  In calculating the sixty-five per cent, an owner's entire interest in each tract

in the proposed unit area, including any divided, undivided, partial, fee, or other

interest in the tract, shall be included to the fullest extent of that interest. (2) The chief may make a motion, without application, for the operation as a unit of

an entire pool or part of the pool. (B) An applicant shall include with the application for unit operation both of the following: (1) A nonrefundable fee of ten thousand dollars; (2) Any additional information requested by the chief. (C)(1) The chief shall hold a hearing regarding an application submitted under division

(A)(1) of this section or regarding the chief's motion made under division (A)(2)

of this section.  Except as otherwise provided in division (C)(2) of this section, the chief shall

hold the hearing not more than sixty days after the date the chief receives the application

or makes the motion, as applicable. (2) If the chief determines that an application is materially incomplete before the required

hearing date, the chief shall notify the applicant.  The applicant shall respond to the chief not later than three business days from

receipt of the notice to correct the application.  If the applicant does not timely correct the application, the chief may reschedule

the hearing date. (3) At the hearing, the chief shall consider the need for the operation as a unit of

an entire pool or part thereof. (D) The chief shall make an order providing for the unit operation of a pool or part

thereof if the chief finds that such operation is reasonably necessary to increase

substantially the ultimate recovery of oil and gas, and the value of the estimated

additional recovery of oil or gas exceeds the estimated additional cost incident to

conducting the operation.  The chief shall issue the order not later than sixty days after the date of the

hearing, unless the chief denies the application or motion by order within that sixty-day

period. (E) The order shall be upon terms and conditions that are just and reasonable and shall

prescribe a plan for unit operations that shall include: (1) A description of the unitized area, termed the unit area; (2) A statement of the nature of the operations contemplated; (3) An allocation to the separately owned tracts in the unit area of all the oil and

gas that is produced from the unit area and is saved, being the production that is

not used in the conduct of operations on the unit area or not unavoidably lost.  The allocation shall be in accord with the agreement, if any, of the interested

parties.  If there is no such agreement, the chief shall determine the value, from the evidence

introduced at the hearing, of each separately owned tract in the unit area, exclusive

of physical equipment, for development of oil and gas by unit operations, and the

production allocated to each tract shall be the proportion that the value of each

tract so determined bears to the value of all tracts in the unit area. (4) A provision for the credits and charges to be made in the adjustment among the owners

in the unit area for their respective investments in wells, tanks, pumps, machinery,

materials, and equipment contributed to the unit operations; (5) A provision providing how the expenses of unit operations, including capital investment,

shall be determined and charged to the separately owned tracts and how the expenses

shall be paid; (6) A provision, if necessary, for carrying or otherwise financing any person who is

unable to meet the person's financial obligations in connection with the unit, allowing

a reasonable interest charge for such service; (7) A provision for the supervision and conduct of the unit operations, in respect to

which each person shall have a vote with a value corresponding to the percentage of

the expenses of unit operations chargeable against the interest of that person; (8) The time when the unit operations shall commence, and the manner in which, and the

circumstances under which, the unit operations shall terminate; (9) Such additional provisions as are found to be appropriate for carrying on the unit

operations, and for the protection or adjustment of correlative rights. (F) No order of the chief providing for unit operations shall become effective unless

and until the plan for unit operations prescribed by the chief has been approved in

writing by those owners who, under the chief's order, will be required to pay at least

sixty-five per cent of the costs of the unit operation, and also by the royalty or,

with respect to unleased acreage, fee owners of sixty-five per cent of the acreage

to be included in the unit.  If the plan for unit operations has not been so approved by owners and royalty owners

at the time the order providing for unit operations is made, the chief shall upon

application and notice hold such supplemental hearings as may be required to determine

if and when the plan for unit operations has been so approved.  If the owners and royalty owners, or either, owning the required percentage of interest

in the unit area do not approve the plan for unit operations within a period of six

months from the date on which the order providing for unit operations is made, the

order shall cease to be of force and shall be revoked by the chief. (G) An order providing for unit operations may be amended by an order made by the chief,

in the same manner and subject to the same conditions as an original order providing

for unit operations, provided that: (1) If such an amendment affects only the rights and interests of the owners, the approval

of the amendment by the royalty owners shall not be required. (2) No such order of amendment shall change the percentage for allocation of oil and

gas as established for any separately owned tract by the original order, except with

the consent of all persons owning interest in the tract. (H) The chief, by an order, may provide for the unit operation of a pool or a part thereof

that embraces a unit area established by a previous order of the chief.  Such an order, in providing for the allocation of unit production, shall first treat

the unit area previously established as a single tract, and the portion of the unit

production so allocated thereto shall then be allocated among the separately owned

tracts included in the previously established unit area in the same proportions as

those specified in the previous order. (I) Oil and gas allocated to a separately owned tract shall be deemed, for all purposes,

to have been actually produced from the tract, and all operations, including, but

not limited to, the commencement, drilling, operation of, or production from a well

upon any portion of the unit area shall be deemed for all purposes the conduct of

such operations and production from any lease or contract for lands any portion of

which is included in the unit area.  The operations conducted pursuant to the order of the chief shall constitute a fulfillment

of all the express or implied obligations of each lease or contract covering lands

in the unit area to the extent that compliance with such obligations cannot be had

because of the order of the chief. (J) Oil and gas allocated to any tract, and the proceeds from the sale thereof, shall

be the property and income of the several persons to whom, or to whose credit, the

same are allocated or payable under the order providing for unit operations. (K) No order of the chief or other contract relating to the sale or purchase of production

from a separately owned tract shall be terminated by the order providing for unit

operations, but shall remain in force and apply to oil and gas allocated to the tract

until terminated in accordance with the provisions thereof. (L) Notwithstanding divisions (A) to (G) of section 155.33 of the Revised Code and rules adopted under it, the chief shall issue an order for the unit operation

of a pool or a part of a pool that encompasses a unit area for which all or a portion

of the mineral rights are owned by the department of transportation. (M) Except to the extent that the parties affected so agree, no order providing for unit

operations shall be construed to result in a transfer of all or any part of the title

of any person to the oil and gas rights in any tract in the unit area.  All property, whether real or personal, that may be acquired for the account of

the owners within the unit area shall be the property of such owners in the proportion

that the expenses of unit operations are charged.