84R8720 SMH-F
By: Fraser S.B. No. 919
A BILL TO BE ENTITLED
AN ACT
relating to oil and gas wells that traverse multiple tracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 85.046, Natural Resources Code, is
amended by adding Subsection (d) to read as follows:
(d) Unless expressly prohibited by a lease, deed, or other
contract, an operator or lessee with the right to drill an oil or
gas well on or produce or develop oil or gas from each tract
independently may, under a permit issued by the commission, drill,
operate, and produce oil or gas from an oil or gas well that
traverses multiple tracts in order to prevent waste, promote
conservation, or protect correlative rights. If there is not an
agreement among any of the affected owners of royalty or mineral
interests in the tracts regarding the manner in which production
from the well shall be allocated among the tracts, the production
shall be allocated to each tract in the proportion that the operator
or lessee reasonably determines reflects the amount produced from
each tract. The operator or lessee must send written notice of the
production allocation to each affected royalty or mineral interest
owner at the owner's last known address. If an owner of a royalty or
mineral interest in a tract enters into an agreement with the
operator or lessee regarding the manner in which production from
the well shall be allocated to the tract, the agreement prevails
over the allocation determined by the operator or lessee under this
subsection. On application of an affected person, the commission,
after notice and opportunity for hearing, may determine whether a
production allocation under this subsection:
(1) will harm the correlative rights of the working or
royalty interest owners;
(2) is necessary to prevent waste or adequately
protect the correlative rights of the affected owners; and
(3) accurately attributes to each affected interest
owner its fair share of the aggregated production.
SECTION 2. If any provision of this Act or its application
to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to
this end the provisions of this Act are declared to be severable.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2015.