SECTION 165:10-27-3. Definitions

  The following words or terms, when used in this Subchapter, shall have the following meaning, unless the context clearly indicates otherwise.

"Owner" means a person or governmental entity with a legal interest in the mineral acreage under a well which entitles that person or entity to oil or gas production or the proceeds or revenues therefrom.

"Produce", "producing" and "production" mean the physical act of severance of oil and gas from a well by an owner and includes but is not limited to the sale or other disposition thereof.

"Producing owner" means an owner entitled to produce who during a given month produces oil or gas for its own account or the account of subsequently created interests as they burden its interest.

"Proportionate production interest" means that interest in production which a working interest owner is entitled to produce in order to adjust for shifting of royalty burdens among working interest owners under the royalty provisions of 52 O.S. Sections 570.1, et seq., and is equal to the quotient of:

(A)   the sum of a working interest owner's net revenue interest plus the net revenue interests of any subsequently created interests as they burden such owner's working interest,

(B)   divided by the remainder of one (1) less the royalty share.

"Proportionate royalty share" means the percentage of the royalty share owned by a royalty interest owner calculated by dividing such owner's royalty interest in a well by the royalty share.

"Royalty interest" means the entirety of the percentage interest in production or proceeds therefrom:

(A)   reserved or granted by a mineral interest owner exclusive of any interest defined as a working interest or a subsequently created interest, or

(B)   otherwise provided or ascribed to a mineral interest owner by statute, rule, order or operation of law.

"Royalty interest in a well" means an owner's royalty interest multiplied by the quotient of:

(A)   the gross mineral acres under the well attributable to such interest, divided by

(B)   the total mineral acres under the well.

"Royalty proceeds" means the share of proceeds or other revenue derived from or attributable to any production of oil and gas attributable to the royalty share, but shall not include payments of bonus, delay rentals, shut-in royalties or any additional royalty payable to the Commissioners of the Land Office or other governmental entity, pursuant to and valued according to the terms of its oil and gas lease, which is calculated separately from the royalty portion of actual proceeds from the sale of oil or gas.

"Royalty share" means the percentage of the well equal to the sum of all royalty interests in the well.

"Share of production" means the monthly entitlement to produce belonging to a producing owner.

"Shipper" means any entity who contracts with a transporter to move gas through the transporter's system.

"Subsequently created interest" means any interest carved from a working interest other than a royalty interest. In addition to the royalty interest contained in a lease, a non-participatory interest created by a working interest owner for the benefit of a mineral interest owner in excess of a one-eighth (1/8) royalty interest may, by separate agreement other than the oil and gas lease, be a subsequently created interest and thereby not be communitized under the terms of the Production Revenue Standards Act only if there is clear and unambiguous language expressing that intent in the creating document. The additional royalty payable to the Commissioners of the Land Office or other governmental entity pursuant to and valued according to the terms of its oil and gas lease, which is calculated separately from the sale of oil or gas, shall also be a subsequently created interest and thereby shall not be communitized under 52 O.S. Section 570.1, et seq.

"Well" means an oil or gas well, and shall include:

(A)   a well having uniform ownership as to all producing zones, or

(B)   a drilling and spacing unit having uniform ownership wherein multiple wells producing gas are commonly metered, and

(C)   each separately metered producing zone within a single wellbore wherein ownership varies by zone.

"Working interest" means the interest in a well entitling the owner thereof to drill for an produce oil and gas, including but not limited to the interest of a participating mineral owner to the extent set forth in Section 87.1 of Title 52 of the Oklahoma Statutes.

[Source: Added at 10 Ok Reg 2601, eff 6-25-93; Amended at 11 Ok Reg 3699, eff 7-11-94]