Oklahoma § 52-570.6 - Selling royalty gas in kind - Consumption and accounting

§ 52-570.6. Selling royalty gas in kind - Consumption and accounting

for royalty gas.

Oklahoma Statutes - Title 52. Oil and Gas

A. A royalty interest owner who has a right to sell royalty gas

in kind may do so as described in the agreement creating such right,

but in no event upon less than sixty (60) days' prior written notice

to its lessee or lessees and the operator. Solely for purposes of

revenue allocation under the Production Revenue Standards Act, the

interest of a royalty interest owner selling gas and the working

interest burdened thereby shall each be regarded as part royalty

interest and part working interest, in the same percentages that the

royalty and working interests are provided in the lease. A royalty

interest owner selling gas shall remit the royalty share of its gas

sales to the operator in the same manner as any other producing

owner.

B. If metered, consumption of gas from a well by a royalty

interest owner or surface owner wherein there is no sale of such gas

shall be deemed production by the working interest owner burdened by

the contractual right to consume gas and shall be accounted for at

the average price, weighted by volume, of gas from that well sold by

such working interest owner during that month. In the absence of a

sale by such working interest owner, the average price, weighted by

volume, of gas from that well sold by all producing owners during

that month, shall be used.

C. A burdened working interest owner and the operator shall

have the right to accomplish the accounting required pursuant to

this section by offset or adjustment.

D. Royalty gas taken in kind by the Commissioners of the Land

Office shall be considered consumption of gas from a well by a

royalty interest owner and shall be deemed production by the working

interest owner burdened by the contractual right of the

Commissioners of the Land Office to take such gas in kind. Such gas

shall be accounted for by the working interest owner so burdened at

the average price, weighted by volume, of gas from that well sold by

such working interest owner during that month. In the absence of a

sale by such working interest owner, the average price, weighted by

volume, of gas from that well sold by all producing owners during

that month shall be used. The Commissioners of the Land Office

shall account to such working interest owner for such royalty gas

taken in kind at the average price, weighted by volume, of gas from

that well sold by all producing owners during that month.

Added by Laws 1992, c. 190, § 6, eff. July 1, 1993.