Oklahoma § 52-570.9 - Production rights of owner - Ownership and payment of

§ 52-570.9. Production rights of owner - Ownership and payment of

proceeds - Working interest owner's rights, duties and liability Effect of act.

Oklahoma Statutes - Title 52. Oil and Gas

A. Each owner entitled to produce shall at a minimum have the

right to produce separately its proportionate production interest in

monthly production, subject to balancing restrictions created by

statute, rule, agreement or operation of law; provided, however, no

provision of the Production Revenue Standards Act shall create a new

right for any owner to produce in excess of its proportionate

production interest share of the total recoverable reserves from a

well. As used herein, an owner is entitled to produce when by right

of contract, lease, mineral ownership, Corporation Commission order

or operation of law, such owner has acquired or retained a current

right to separately contract for, dispose of or sell oil or gas from

a well. Nothing in the Production Revenue Standards Act shall

prevent any owner having the right to take production in kind,

including a royalty interest owner, from so taking its share of

production in kind or create a right to take in kind or use

production, which right did not previously exist.

B. Except as otherwise provided by statute, rule, agreement or

operation of law, proceeds from production, after deduction of

royalty proceeds, shall be separately owned by the producing owner

and any subsequently created interests attributable to the interests

of such owner. A working interest owner shall be responsible for

payment and reporting to any subsequently created interest which

burdens its working interest.

C. All rights, burdens, duties and undertakings attributable to

working interest other than the duty to pay royalty proceeds shall

remain with such working interest and shall not be communitized

pursuant to the Production Revenue Standards Act.

D. Notwithstanding any other provisions of the Production

Revenue Standards Act, any working interest owner that pays or

causes to be paid royalty proceeds for gas production in accordance

with the Production Revenue Standards Act valued according to the

terms of such working interest owner's lease shall be relieved from

all liability to royalty interest owners for any further payment of

proceeds from such production.

E. Nothing in the Production Revenue Standards Act shall:

1. Prevent any working interest owner entitled to produce gas

from receiving the price agreed upon by contract;

2. Eliminate or otherwise affect the rights and remedies

available to any operator or working interest owner against any

other working interest owner, including but not limited to an

operator, that defaults or fails to pay its proportionate share of

the well cost; or

3. Set the price, terms or conditions under which a purchaser

takes the production or set any restrictions, limitations, floor or

ceiling on the price to be paid for such production.

Added by Laws 1992, c. 190, § 9, eff. July 1, 1993.

Oklahoma Statutes - Title 52. Oil and Gas