27-516

27-516. Rules

A. The commission shall make rules and amend them as deemed necessary for the
proper administration and enforcement of this article, including the following rules and
orders:

1. Requiring the drilling, casing and plugging of wells in a manner to prevent:

(a) Escape of oil and gas from one stratum to another.

(b) Intrusion of water into an oil or gas stratum from a separate stratum.

(d) Waste.

2. Requiring reports showing the location of oil and gas wells and requiring filing
of logs and drilling records within thirty days after drilling is completed for a well
drilled for oil or gas.

3. Requiring a reasonable bond with good and sufficient surety conditioned on the
performance of the duties prescribed in paragraphs 1 and 2 of this subsection including
the obligation to plug each dry or abandoned well.

4. Preventing drowning by water of any stratum or part capable of producing oil or
gas in paying quantities and preventing the premature and irregular encroachment of water
which reduces or tends to reduce the total ultimate recovery of oil or gas from any pool.

5. Requiring the operation of wells with efficient gas-oil ratio and fixing the
limits of such ratios.

6. Preventing blowouts, caving and seepage.

7. Preventing creation of unnecessary fire hazards.

8. Requiring identification of ownership of oil and gas wells, producing leases,
refineries, tanks, plants, structures and storage and transportation equipment and
facilities.

9. Regulating shooting, perforating and chemical treatment of wells.

10. Regulating gas cycling operations.

11. Regulating secondary recovery methods, including introduction of gas, air, water
or any other substances into producing formations.

12. Regulating spacing of wells and establishing drilling units.

13. Limiting, allocating and apportioning production of oil and gas from a pool or
field for prevention of waste, and allocating production between tracts of land under
separate ownership in a pool on a fair and equitable basis so that each tract will be
permitted to produce not more than its just and equitable share from such pool.

14. Preventing, so far as practicable, reasonably avoidable drainage from each
developed unit, not equalized by counterdrainage.

15. Requiring a producer of oil or gas to submit for each oil or gas well operated,
on a form prescribed by the commission, a monthly report of actual production from each
oil or gas well. Such report shall be submitted on or before the twenty-fifth day of the
next succeeding month.

16. Requiring persons making settlement with the owner of oil or gas interests to
render statements to the owner showing the quantity and gravity purchased and the price
per barrel of oil or the price per one thousand cubic feet of gas.

17. Requiring, either generally or in a particular area, a certificate of clearance
for transportation or delivery of oil, gas or any product.

18. Requiring the applicant for a drilling permit, if the surface of the land is
owned by another not in a contractual relationship with the applicant, to post bond in a
reasonable sum with good and sufficient surety conditioned on payment of just
compensation to the landowner for actual damages to the surface of or improvements on the
land caused by the drilling permittee's operations.

19. Requiring all forms and reports requested by the commission to be submitted to
the commission on or before the twentieth day of the next succeeding month for monthly
reports or within twenty days following the completion of the action requiring the
report, except as otherwise provided by the commission.

20. Requiring the permitting of all wells and the approval of all equipment and
methods:

(a) To create or use existing storage space for the underground storage of
hydrocarbon substances, whether liquid or gaseous.

(b) Used for the injection of any substance into geological strata for the purpose
of pressure maintenance or for the purpose of increasing ultimate recovery.

(d) Used for the disposal of any substance.

B. No rule or order, or change, renewal or extension, except as otherwise provided
by this article, shall, in the absence of an emergency, be made by the commission under
the provisions of this article except after a public hearing of which not less than ten
days' notice has been given. The public hearing shall be held at such time and place as
may be prescribed by the commission, and any interested person shall be entitled to be
heard. Notice shall be given by personal service, by publication or by United States
mail addressed, postage prepaid, to the last known mailing address of the person or
persons affected. The date of service shall be the date on which service was made in the
case of personal service, the date of first publication in the case of notice by
publication and the date of mailing in the case of notice by mailing. The notice shall
issue in the name of the state, shall be signed by a member of the commission or its
deputy, shall specify the style and number of the proceeding and the time and place of
the hearing and shall briefly state the purpose of the proceeding. If the commission
gives notice by personal service, such service may be made by an officer authorized to
serve process or by the commission in the same manner as is provided by law for the
service of process in civil actions in the courts of this state. Proof of service by the
commission shall be by the affidavit of the commission or its authorized representative
making personal service. If service is made by the sheriff, the proof of service shall
be as required by law for service of process in civil actions. If the matter to be heard
concerns the adoption, amendment or repeal of a rule of general applicability, notice
shall be by publication.

C. If an emergency is found by the commission to exist, which in its judgment
requires making, changing, renewing or extending a rule or order without first having a
hearing, the emergency rule or order shall have the same validity as if a hearing had
been held after due notice. The emergency rule or order shall remain in force for not to
exceed thirty days from its effective date but shall expire when a rule or order with
respect to the subject matter of the emergency rule or order becomes effective after due
notice and hearing.