SECTION 165:10-27-10. Administrative fees

(a)   This Section prescribes fees which may be charged by the operator of a gas producing well or substitute payor, for administrative expenses generated by the Production Revenue Standards Act.

(b)   Fees shall be assessed on a per-well basis against the cost- bearing working interests in a well according to respective gross working interest. They shall not be assessed against either royalty interests or non-cost bearing working interests in the well.

(c)   A one-time implementation fee shall cover any cost associated with establishing or modifying the well operator's record keeping for the well, and it shall apply to any existing gas producing well with a date of first production occurring before September 1, 1992. If operations are transferred to a different operator after assessment of the one-time implementation fee, the successor operator may not assess another implementation fee against the working interests in the well.

(d)   Should any working interest owner in a well producing gas fail to fully and timely comply with the requirements of 165:10-27-4, the well operator or substitute payor shall have the right to charge against said non-complying working interest owner a late fee of two hundred-fifty dollars per affected well.

(e)   An annual maintenance fee shall cover any cost associated with record keeping, issuance of gas balancing statements and any election of a producing owner regarding separate distribution of royalty proceeds. Maintenance fees shall be calculated on an annual basis using the first day of May as the anniversary date. Such fees may be prorated and billed on a monthly basis at the well operator's discretion. If a well has a date of first production after the first day of May of the calendar year, the annual maintenance fee shall be prorated based on the remaining number of months before the next anniversary date on the first day of May.

(f)   No working interest owner other than the well operator shall be entitled to assess either an implementation fee or a maintenance fee.

(g)   The rates for implementation fees and annual maintenance fees shall be based on the appropriate table values found in Appendix G to this Chapter, subject to annual adjustments as provided below. The appropriate table value shall be determined from a matrix using the number of working interest owners or royalty owners in a well. The table value shall be adjusted as of the first day of May each year following May 1, 1993. The annual adjustment shall be computed by multiplying the rate currently in use by the percentage of increase or decrease in the annual overhead adjustment factor established by the Council of Petroleum Accountants Societies at its annual spring meeting for purposes of adjusting the combined fixed-rate overhead charges against joint operations in a well.

(h)   Any fee assessed under this Section may be billed or deducted from the working interest owner's share of undistributed proceeds of production.

[Source: Added at 10 Ok Reg 2601, eff 6-25-93]