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ENGROSSED SENATE
BILL NO. 1930 By: Green of the Senate
and
Moore of the House
An Act relating to brine; amending 17 O.S. 2021,
Sections 501, 502, 503, 504, 506, 507, 508, 510, 516,
517, and 519, which relate to the Oklahoma Brine
Development Act; expanding purpose; modifying and
adding definitions; clarifying certain exception;
modifying provisions of certain application;
modifying description of certain evidential findings;
requiring certain orders remain applicable and serve
as certain guidelines; removing certain single source
of supply requirement; authorizing Corporation
Commission to make units certain size and shape;
requiring brine owners proportionally share produced
water; requiring certain measurements of gross
production; modifying certain plan requirements;
modifying description of certain owners; authorizing
proposed operator to seek certain emergency relief;
requiring Commission grant relief upon certain
showing; granting proposed operator right to collect
certain proceeds; requiring set royalty be held in
suspense until final order establishes unit;
detailing requirements for certain royalty rate;
modifying provisions related to changing size of
certain unit; expanding applicability to include
produced water; stating certain inapplicability;
expanding applicability of act to certain units;
making language gender neutral; updating statutory
language and references; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 17 O.S. 2021, Section 501, is
amended to read as follows:
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Section 501. The Legislature finds that it is desirable and
necessary to authorize and provide for unitized management,
operation, and further development of brine and associated solution
gas, to the end that a greater ultimate recovery of brine and
solution gas may be had, waste prevented, and the correlative rights
of owners therein be protected. In addition, the Legislature finds
that it is a desirable public policy and necessity to reduce
disposal of brine water, also referred to as produced water, from
oil and gas operations and encourage reuse, recycling, and
reclaiming of such water and extraction of its constituent elements
included therein. It is further found to be in the public interest
to foster, encourage, and promote the development and production in
the State of Oklahoma of brine, produced water, and solution gas in
this state and to authorize and provide for the operation and
development of unitized brine and solution gas properties, and to
authorize the Corporation Commission to regulate brine, produced
water, and solution gas production. Produced water subject to the
jurisdiction of the Oil and Gas Produced Water and Waste Recycling
and Reuse Act shall not be governed by the Oklahoma Brine
Development Act unless the produced water is intended to be or is
processed for the commercial extraction and sale of constituent
elements, or any one of such elements.
SECTION 2. AMENDATORY 17 O.S. 2021, Section 502, is
amended to read as follows:
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Section 502. As used in this act the Oklahoma Brine Development
Act:
1. “Commission” shall mean the Corporation Commission of
Oklahoma;
2. “Person” shall include any individual, partnership,
corporation or association of whatever character;
3. “Common source of supply” shall include that area which is
underlain, or which from geological or other scientific data, or
from drilling operations, or other evidence, appears to be underlain
by a common accumulation of brine; provided, that, if any such area
is underlain or appears from geologic or other scientific data, or
from drilling operations, or from other evidence to be underlain by
more than one common accumulation of brine separated from each other
by a strata of earth and not connected with each other, then such
area, as to each said common accumulation of brine, shall be deemed
a separate common source of supply;
4. “Associated oil or gas production” means the oil or gas
produced from an oil or gas well from which produced water is
extracted as an incident to the production of the oil or gas and the
produced water is utilized for the purpose of extracting its
constituent elements therefrom;
2. “Brine” shall mean means subterranean saltwater salt water
and all of its constituent parts and chemical substances therein
contained, including, but not limited to, bromine, magnesium,
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potassium, lithium, boron, chlorine, iodine, calcium, strontium,
sodium, sulphur sulfur, barium, or other chemical substances
produced with or separated from such saltwater the salt water.
Brine produced as an incident to the production of oil or gas,
unless such brine is saved or sold for the purposes of removing
chemical substances therefrom, shall not be considered brine for the
purposes of this act. Gas, whether found in solution or otherwise,
shall not be included within the meaning of the term “brine” brine;
5. 3. “Brine owner” shall mean means any person entitled to
share in the proceeds from the sale of brine production or produced
water from which constituent elements are recovered from the brine
production or produced water, or the effluent;
6. “Solution gas” shall mean all gas produced from brine wells
from the brine common source of supply within the unit area;
7. “Solution gas owner” shall mean any person entitled to share
in the proceeds from the sale of solution gas;
8. “Owner” or “owners”, unless a more specific term is used,
shall mean any person or entity who qualifies as either a brine
owner or a solution gas owner;
9. “Operator” shall mean a person who has the right to drill
into and produce from any brine common source of supply and to
appropriate that production, either for himself, or for himself and
others, and is authorized by the Commission to drill;
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10. “Effluent” shall mean the liquid remaining after extraction
of the chemical substances from brine;
11. 4. “Brine production unit” or “unit” shall mean means each
separate specific area of land so designated by order of the
Commission for production of brine and associated solution gas and
from brine wells, including the related injection of effluent;
12. “Injection well” shall mean a well authorized by the
Commission for the injection of effluent or other solutions; and
13. “Manufacture” shall mean the complete process of drilling,
completing, equipping and operating production and injection wells
and of extracting and packaging brine
5. “Brine well” means a well specifically drilled or operated
for the primary purpose of extracting brine and shall not include a
well drilled or operated for the primary purpose of producing oil or
gas;
6. “Commission” means the Corporation Commission;
7. “Common source of supply” means the area that is underlain
or which, from geological or other scientific data, from drilling
operations, or from other evidence, appears to be underlain by a
common accumulation of brine. If any area is underlain or appears,
from geological or other scientific data, from drilling operations,
or from other evidence, to be underlain by more than one common
accumulation of brine separated from each other by a strata of earth
and not connected with each other, then the area, as to each such
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common accumulation of brine, shall be deemed a separate common
source of supply. In either circumstance of a brine production unit
or produced water unit, brine may be produced from multiple common
sources of supply from one or more oil or gas wells or one or more
brine wells, which shall all be considered the common source of
supply for purposes of the Oklahoma Brine Development Act;
8. “Constituent elements” means salts, metals, elements, and
other mineralized substances that are dissolved, entrained, or
suspended in subterranean water. The term shall not include skim
oil or hydraulic fracturing fluid;
9. “Effluent” means the liquid remaining after extraction of
the chemical substances from brine;
10. “Extracted constituent element” means any constituent
element extracted from the produced water through reconditioning or
treating of the produced water by mechanical or chemical processes
that is saved and commercially utilized or sold;
11. “Injection well” means a well authorized by the Commission
for the injection of effluent or other solutions;
12. “Manufacture” means the complete process of drilling,
completing, equipping, and operating production and injection wells
and of extracting and packaging brine;
13. “Oil or gas well” means a well drilled or operated for the
primary purpose of extracting oil or gas as such terms are defined
in Section 86.1 of Title 52 of the Oklahoma Statutes;
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14. “Operator” means a person who has the right to drill into
and produce from any brine common source of supply and to
appropriate that production, either for the operator or the operator
and others, or to extract the constituent elements of brine produced
as an incident to the production of oil and gas, and is authorized
by the Commission to drill or extract the constituent elements of
brine;
15. “Owner” means, unless a more specific term is used, any
person or entity who qualifies as either a brine owner or a solution
gas owner;
16. “Person” means any individual, partnership, corporation, or
association of whatever character;
17. “Produced water” means the subterranean salt water and the
other liquid waste associated with, incidental to, or extracted
during oil and gas drilling, completion, or production processes.
Produced water subject to the jurisdiction of the Oil and Gas
Produced Water and Waste Recycling and Reuse Act shall not be
governed by the Oklahoma Brine Development Act, unless the produced
water is intended to be or is processed for the commercial
extraction and sale of the constituent elements, or any one of such
elements;
18. “Produced water unit” means the specific area of land
designated by order of the Commission for the commercial extraction
and sale of constituent elements, or any one of such elements, from
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produced water. The Commission, based upon the facts and
circumstances, shall determine the size and shape of any produced
water unit. Unless a larger size unit is deemed appropriate under
the facts and circumstances, the Commission shall not unitize an
area that exceeds the size of the spacing or drilling unit of the
associated oil or gas well from which the produced water is derived.
Each such produced water unit shall be limited to the same common
source or sources of supply as that of the associated oil or gas
well from which produced water is being received for the extraction
of constituent elements of such brine. Furthermore, an applicant
may seek to create two or more produced water units by and through
the filing of a single Commission case. If the Commission has not
previously established a drilling or spacing unit for the oil or gas
well or wells from which the produced water is derived, the
Commission shall in its discretion determine the size and shape of
the produced water unit, taking into consideration all facts and
circumstances including, but not limited to, the economics of
collection, transportation, and processing produced water to recover
any extracted constituent element;
19. “Recycled water” means produced water that has been
reconditioned or treated by mechanical or chemical processes into a
reusable form;
20. “Recycler” means a person approved and authorized by the
Commission who receives produced water, for the purpose of saving,
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extracting, reconditioning, or treating the same by mechanical or
chemical processes into a reusable form;
21. “Recycling waste” means the noncommercial by-products or
residual liquids or solid materials that remain after the recycling
or extraction process;
22. “Solution gas” means all gas produced from brine wells from
the brine common source of supply within the brine production unit
area; and
23. “Solution gas owner” means any person entitled to share in
the proceeds from the sale of solution gas.
SECTION 3. AMENDATORY 17 O.S. 2021, Section 503, is
amended to read as follows:
Section 503. A. The Corporation Commission is hereby vested
with jurisdiction over the following:
1. The drilling for and or production of brine for commercial
purposes;
2. Class V injection wells used for the injection or disposal
of mineral brines as defined in the federal Safe Drinking Water Act
and 40 CFR C.F.R., Part 146; and
3. Class V wells used to inject spent brine into the same
formation from which it was withdrawn after extraction of halogens
or their salts as defined in 40 CFR C.F.R., Part 146.
B. The Commission may promulgate such rules that:
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1. As are Are reasonably necessary to effectuate the purposes
of this act the Oklahoma Brine Development Act, including rules
governing the drilling of production, injection, or disposal wells
and the injection of effluent into underground formations; and
2. To ensure Ensure that the drilling, casing, and plugging of
wells is done in such a manner as to prevent the escape of brine and
effluent from one formation to another and to prevent the pollution
of fresh water supplies throughout the state.
C. The enforcement and adherence to the Oklahoma Brine
Development Act shall not apply to nor shall the Corporation
Commission have jurisdiction over Class I, III, IV, or V wells
regulated by the Department of Environmental Quality pursuant to the
federal Safe Drinking Water Act and 40 CFR C.F.R., Parts 144 through
148, inclusive, and the Oklahoma Environmental Quality Act.
SECTION 4. AMENDATORY 17 O.S. 2021, Section 504, is
amended to read as follows:
Section 504. A. A party desiring to unitize brine or produced
water rights shall file with the Corporation Commission an
application setting forth a description of the proposed brine
production unit or produced water unit area with a map or plat
thereof attached. The application shall allege the existence of the
facts required to be found by the Commission as provided in Section
7 506 of this act title. The application shall set forth the name
and address of each brine owner within the area affected by the
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application. Each such person shall be a respondent to the
application. In an application to enlarge the brine production unit
or produced water unit area, brine owners within the existing unit
and brine owners in the area to be added to the unit shall be
respondents to the application.
B. In the event the brine sought to be unitized in a proposed
brine production unit is found in association with solution gas, the
application shall set forth the name and address of each solution
gas owner within the area affected by the application. Each such
person shall be a respondent to the application. In an application
to enlarge the brine production unit area, solution gas owners
within the existing brine production unit and solution gas owners in
the area to be added to the brine production unit shall be
respondents to the application.
C. Every application to establish a brine production unit or
produced water unit shall have attached thereto a recommended plan
of unitization applicable to the proposed unit area.
SECTION 5. AMENDATORY 17 O.S. 2021, Section 506, is
amended to read as follows:
Section 506. A. If, after proper application and notice, the
Commission in its hearing shall find by substantial evidence that:
1. There exists a common source of supply or prospective common
source of supply for brine or produced water;
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2. Unitized management, operation, and further development of
the common source of supply for brine or produced water from oil or
gas wells is reasonably necessary in order to effectively develop
the brine common source of supply and allow for the extraction of
its constituent elements;
3. Unitized operation as applied to such common source of
supply or produced water is feasible and will prevent waste and,
with reasonable probability, will result in greater ultimate
recovery of brine and its constituent parts;
4. Such unitization is for the common good and will result in
the general advantage of the owners of the brine rights within the
proposed brine production unit or produced water unit and will
protect the correlative rights of the owners within the common
source of supply or produced water; and
5. The creation of a brine production unit or produced water
unit will accomplish one or more of the following:
a. avoid the drilling of unnecessary wells,
b. prevent waste,
c. protect correlative rights, or
d. increase the ultimate recovery of brine from the
common source of supply and unit covered by the
application, or
e. allow recovery and extraction of constituent elements
from produced water,
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the Commission shall make a finding to that effect and enter an
order creating the unit, and requiring unitized operation of the
prospective common source of supply or portion thereof described in
the order.
B. If the Commission in its hearing shall find by substantial
evidence that:
1. The proposed unit is a brine production unit and not a
produced water unit;
2. Solution gas exists within the common source of supply or
prospective common source of supply;
2. 3. The production of brine is impossible or impractical
without also producing the solution gas; and
3. 4. The unitization of the brine common source of supply is
impractical or impossible without also unitizing the associated
solution gas,
the Commission shall make a finding to that effect and shall further
provide in its order for the unitization of the solution gas within
the brine production unit area.
C. Orders of the Commission entered pursuant to Section 87.1 of
Title 52 of the Oklahoma Statutes establishing drilling and spacing
units for the production of oil, gas, or oil and gas shall not be
applicable to the drilling of brine wells and or the production of
solution gas from a brine production unit established by an order
issued pursuant to this act the Oklahoma Brine Development Act.
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However, such drilling and spacing orders shall remain applicable to
oil or gas wells and associated oil and gas production and shall
serve as general nonmandatory guidelines for establishing the size,
shape, and common source of supply of any produced water unit
established under the Oklahoma Brine Development Act.
SECTION 6. AMENDATORY 17 O.S. 2021, Section 507, is
amended to read as follows:
Section 507. A. The order of the Corporation Commission shall
define the area of the common source or sources of supply or portion
thereof to be included within the brine production unit or produced
water unit area. Each unit and unit area shall be limited to all or
a portion of a single common source of supply Except where a larger
unit is shown to be reasonable under the facts and circumstances
presented, the Commission may authorize the unit area to be of the
same size and shape as the units authorized by the Commission for
the associated oil and gas production.
B. Brine owners within the brine production unit shall share in
the production of brine in the proportion that their acreage bears
to total acreage within the unit, unless the Commission, after
notice and hearing, shall provide for another method in the unit
plan. Solution gas owners within the brine production unit shall
share in production of solution gas in the proportion that their
acreage bears to total acreage in the unit, unless the Commission,
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after notice and hearing, shall provide for another method in the
unit plan.
C. Brine owners within the produced water unit shall share in
the production of produced water in the proportion that their
acreage bears to total acreage within the unit. The gross
production from each produced water unit shall be measured by the
total volume of produced water derived from the associated oil or
gas well or wells prior to the extraction of any constituent
elements and not by any other metric.
SECTION 7. AMENDATORY 17 O.S. 2021, Section 508, is
amended to read as follows:
Section 508. A. The plan of unitization for each such brine
production unit or produced water unit and unit area shall be one
suited to the needs and requirements of the particular unit
dependent upon the facts and conditions found to exist with respect
thereto. In addition to such other terms, provisions, conditions,
and requirements found by the Corporation Commission to be
reasonably necessary or proper to effectuate or accomplish the
purpose of this act the Oklahoma Brine Development Act, and subject
to the further requirements hereof, each such plan of unitization
shall contain fair, reasonable, and equitable provisions for:
1. The efficient unitized management or control of further
development and operation of the brine production unit or produced
water unit area. Under such the plan, the actual operations of the
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unit shall be carried on by one of the owners of the right to drill
for and produce brine within the unit area as unit operator or in
the case of produced water associated with oil and gas production,
by the operator of the produced water unit approved by the
Commission. The designation of unit operator shall be by majority
vote of the owners of the right to drill for and produce brine in
the unit in accordance with their acreage ownership in the unit or
as designated by the Commission in the case of produced water
associated with oil and gas production;
2. The method and circumstances under which brine or effluent
from the unit, or from any other source, may be injected into the
common source of supply under the unit area or into other
formations;
3. The fair, just, and reasonable compensation to be awarded to
any owner within the brine production unit or produced water unit
who does not wish to participate in development of the unit by
paying such owner’s share of unit costs;
4. The fair, just, and reasonable manner of participation for
any owner desiring to participate in the development of the brine
production unit or produced water unit by paying such owners owner’s
share of unit costs;
5. The fair, just, and reasonable allocation and distribution
to each owner and the value of such owner’s share of the brine,
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including the usable resources extracted from the brine, and
solution gas, if any, produced from the unit;
6. The procedure and basis upon which wells, equipment, and
other properties of the owners within the brine production unit or
produced water unit area are to be taken over and used for unit
operations, including the method of arriving at the compensation
therefor, or for otherwise proportionately equalizing the investment
of the several owners in the unit;
7. The method of apportioning costs of development and
operation between owners of brine and owners of solution gas, if
solution gas has also been unitized;
8. The time when the plan of unitization shall become
effective; and
9. The time when and conditions under which the unit shall or
may be dissolved and all affairs concluded.
B. No order of the Commission creating a brine production unit
and prescribing the plan of unitization applicable thereto to the
brine production unit shall become effective unless and until the
plan of unitization has been signed, or in writing ratified or
approved by record owners of the right to drill of not less than
fifty-five percent (55%) of the brine production unit area affected
thereby and by owners of record of not less than fifty-five percent
(55%) (exclusive of royalty interest owned by lessees or
subsidiaries of any lessee) of the royalty interest in and to the
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brine production unit area and the Commission has made a finding
either in the order creating the unit or in a supplemental order
that the plan of unitization has been so signed, ratified, or
approved by lessees and royalty brine owners of record owning the
required percentage interest in and to the brine production unit
area. Provided, however, in any instance where a royalty brine
owner has, through lease or other agreement, previously authorized
pooling or unitization of a size equal to or larger than the size
specified in the Commission order, said such lease or other
agreement shall be deemed to be such royalty the brine owner’s
authorization to unitize, and no additional signature, ratification,
or approval shall be necessary from such owner, unless the lease
provides for a different production sharing formula than set out in
the plan of unitization. Further provided, however, in any instance
where a royalty owner has the brine owners of record have, through
lease or other agreement, previously consented to have the unit
boundaries and the allocation formula established by the Commission,
said such lease or other agreement shall be deemed to be such
royalty owner’s the brine owners’ authorization to unitize, and no
additional signature, ratification, or approval shall be necessary
from such owner owners. Where the plan of unitization has not been
so signed, ratified, or approved by lessees and royalty brine owners
of record owning the required percentage interest in and to the
brine production unit area at the time the order creating the unit
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is made, the Commission shall hold such additional and supplemental
hearings as may be requested or required to determine if and when
the plan of unitization has been so signed, ratified, or approved by
lessees and royalty brine owners of record owning the required
percentage interest in and to the brine production unit area and
shall, in respect to such hearings, make and enter a finding of its
determination in such regard. In the event lessees or royalty brine
owners, or either, of record owning the required percentage interest
in and to the brine production unit area have not so signed,
ratified, or approved the plan of unitization within a period of six
(6) months from and after the date on which the order creating the
brine production unit is made, the order creating the unit shall be
deemed vacated and of no force and effect. The provisions of this
subsection are hereby expressly made inapplicable to the formation
of a produced water unit.
C. A participating brine owner shall have a one-time election
to sell, and any brine owner in the unit with brine refining
equipment shall have the obligation to buy, the brine produced from
the unit at the value determined by the Commission; provided,
however, nothing herein shall require the purchasing brine owner to
purchase brine when it is not producing brine from the unit for its
own account.
D. 1. Upon the filing of an application for the establishment
of a produced water unit and prior to the Commission’s adjudication
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of such application, the proposed operator of the unit may seek
emergency relief at the Commission for the immediate production,
commercial extraction, and sale of constituent elements from
produced water derived from the associated oil or gas well, and the
Commission shall grant such relief upon a showing that such
emergency relief is reasonable and necessary under the established
facts and circumstances.
2. The proposed operator shall have the right to collect all
proceeds from the sale of brine or its constituent elements prior to
the entry of a final order establishing the produced water unit,
provided that a set royalty shall be held in suspense by the
proposed operator for the benefit of any unleased brine owners
within the proposed produced water unit until the Commission enters
a final order establishing the produced water unit. Such royalty
rate shall be set at the prevailing fair market value rate, which
shall be determined by evidence of the highest royalty paid for
arm’s length negotiated brine leases within the produced water unit
and any other adjoining produced water unit.
SECTION 8. AMENDATORY 17 O.S. 2021, Section 510, is
amended to read as follows:
Section 510. A. The Corporation Commission shall have
jurisdiction to increase the size of an existing brine production
unit or produced water unit area where it is shown, upon proper
application, notice, and hearing, that:
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1. Land adjacent to the existing unit is underlain by the same
common source of supply as that found within the unit area; and
2. Inclusion of the additional land will either:
a. increase unit efficiency, or
b. result in greater ultimate recovery of brine or
produced water, or
c. prevent waste; and
3. Inclusion of the additional land is fair, just, and
reasonable, both to parties owning brine or produced water interests
in the additional land and to parties owning interests in the
existing unit; and
4. The requirements of Section 9 508 of this act title have
been met.
B. The Commission shall have jurisdiction to decrease the size
of an existing brine production unit or produced water unit where it
is shown, upon proper application, notice, and hearing, that the
land to be excluded is of no value to the unit because:
1. It is not underlain by the common source of supply; and
2. Its presence does not contribute to more efficient unit
operations, by providing the site for an injection well or wells, or
by assisting in the conduct of waterflood operations, or by
otherwise increasing unit efficiency; and
3. Exclusion of the land is fair, just, and reasonable.
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SECTION 9. AMENDATORY 17 O.S. 2021, Section 516, is
amended to read as follows:
Section 516. Sections 2 501 through 16 515 of this act title
shall not have any effect on any existing brine, solution gas, or
brine and solution gas units which have been created voluntarily or
by a judicial decree to the extent such unit was established as of
the date of this act September 1, 1990. Any existing brine or brine
and solution gas unit may be expanded using the provisions of this
act the Oklahoma Brine Development Act.
SECTION 10. AMENDATORY 17 O.S. 2021, Section 517, is
amended to read as follows:
Section 517. A. The proceeds derived from the sale of brine,
produced water, solution gas, or brine and solution gas production
shall be paid to persons legally entitled thereto, commencing no
later than six (6) months after the date of first sale, and
thereafter no later than sixty (60) days after the end of the
calendar month within which proceeds are received for subsequent
production. In those instances where proceeds are not received for
disposition of brine, produced water, solution gas, or brine and
solution gas production due to venting, flaring, use for operations,
nonpayment from purchasers, or any other cause, the time periods
previously specified within which any required payment shall be paid
to the persons legally entitled thereto shall be measured from the
date on which such venting, flaring, use for operations, nonpayment,
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or other event occurred. Provided, proceeds from the sale of brine,
produced water, and solution gas from lands covered by a pending
application for unitization pursuant to this act the Oklahoma Brine
Development Act shall be paid to persons legally entitled thereto
within six (6) months from the entry of a final order of
unitization, together with interest thereon at the rate of six
percent (6%) per annum to be compounded annually, calculated from
the date of first sale after the filing of the application for
unitization. Such payment is to be made to persons entitled thereto
by the operator of such production. Provided, such operator may
remit to the persons entitled to such proceeds from production
semiannually for the aggregate of six (6) months’ accumulation of
monthly proceeds of amounts less than Twenty-five Dollars ($25.00).
Further provided, that any delay in determining the persons legally
entitled to an interest in such proceeds from production caused by
unmarketable title to such interest shall not affect payments to
persons whose title is marketable. Provided, however, that in those
instances where such proceeds cannot be paid because the title
thereto is not marketable, the operator of such production shall
cause all proceeds due such interest to earn interest at the rate of
six percent (6%) per annum to be compounded annually, calculated
from the last day of the production month, until such time as the
title to such interest has been perfected. Marketability of title
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shall be determined in accordance with the then current title
examination standards of the Oklahoma Bar Association.
B. The following information shall be included with each
payment made to a brine owner from the sale of brine:
1. Unit identification;
2. Month and year of sales included in the payment;
3. Total volume of production from the unit of brine, produced
water, or solution gas and, in the case of a brine production unit,
the concentration of chemical substances contained therein and
volumes extracted therefrom;
4. Owner’s interest, expressed as a decimal, in production from
the unit;
5. Total value of extracted chemical substances and solution
gas, including the price per unit of measurement at which the
products were sold;
6. Owner’s share of the total value of sales prior to any
deductions;
7. Owner’s share of the total value of sales after any
deductions; and
8. A specific detailed listing of the amount and purpose of any
deductions, including, but not limited to, BTU adjustments and
taxes, from the gross proceeds due to the owner.
C. Any operator that violates this section shall be liable to
the persons legally entitled to the proceeds from production for the
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unpaid amount of such proceeds with interest thereon at the rate of
twelve percent (12%) per annum to be compounded annually, calculated
from the last day of the production month.
D. The district court for the county in which the unit is
located shall have jurisdiction over all proceedings brought
pursuant to this section. The prevailing party in any proceeding
brought pursuant to this section shall be entitled to recover any
court costs and reasonable expert witness and attorney’s attorney
fees.
SECTION 11. AMENDATORY 17 O.S. 2021, Section 519, is
amended to read as follows:
Section 519. Before entering upon a site for brine well
drilling, except in instances where there are non-state resident
surface owners, non-state resident surface tenants, unknown heirs,
imperfect titles, surface owners, or surface tenants whose
whereabouts cannot be ascertained with reasonable diligence, the
operator shall give to the surface owner a written notice of his or
her intent to drill containing a designation of the proposed
location and the approximate date that the operator proposes to
commence drilling.
Such notice shall be given in writing by certified mail to the
surface owner. If the operator makes an affidavit that he or she
has conducted a search with reasonable diligence and the whereabouts
of the surface owner cannot be ascertained or such notice cannot be
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delivered, then constructive notice of the intent to drill may be
given in the same manner as provided for the notice of proceedings
to appoint appraisers set forth in Section 22 521 of this act title.
Within five (5) days of the date of delivery or service of the
notice of intent to drill, it shall be the duty of the operator and
the surface owner to enter into good faith good-faith negotiations
to determine the surface damages.
The provisions of Sections 519 through 522 of this title are
hereby expressly made inapplicable to the formation of a produced
water unit.
SECTION 12. This act shall become effective November 1, 2026.
Passed the Senate the 16th day of March, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2026.
Presiding Officer of the House
of Representatives