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USA Statutes : missouri
Title : CONSERVATION, RESOURCES AND DEVELOPMENT
Chapter : Chapter 259 Oil and Gas Production
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There shall be a "State Oil and Gas Council" composed of the
following state agencies and two other persons as provided in section
259.020:
(1) Division of geological survey and water resources;
(2) Division of commerce and industrial development;
(3) Missouri public service commission;
(4) Clean water commission;
(5) University of Missouri. (L. 1965 2d Ex. Sess. p. 917 § 1, A.L. 1972
H.B. 1176)
The member agencies shall be represented on the council by the
executive head of the agency, except that the University of Missouri
shall be represented by a professor of petroleum engineering employed at
the University of Missouri. The executive head of any member agency may
from time to time authorize any member of the agency's staff to represent
it on the council and to fully exercise any of the powers and duties of
an agency representative. Two other persons shall be appointed to the
council by the governor, with the advice and consent of the senate, who
are residents of Missouri and who shall have an interest in and knowledge
of the oil and gas industry. (L. 1965 2d Ex. Sess. p. 917 § 2, A.L. 1972
H.B. 1176)
1. The council shall elect a chairman and vice chairman from the
members of the council other than the representative of the division of
geological survey and water resources. A chairman may serve more than one
term.
2. The state geologist shall act as administrator for the council and
shall be responsible for enforcing the provisions of this chapter. (L.
1965 2d Ex. Sess. p. 917 § 3)
Representatives of the member agencies shall not receive any
additional compensation for their services as representatives on the
council and all expenses of agency representatives shall be paid by their
respective agency. Members appointed because of their interest in and
knowledge of the oil and gas industry shall not receive any compensation
for their services. (L. 1965 2d Ex. Sess. p. 917 § 4, A.L. 1972 H.B. 1176)
Unless the context otherwise requires, the following words mean:
(1) "Certificate of clearance" means a permit prescribed by the council
for the transportation or the delivery of oil or gas or product and
issued or registered in accordance with the rule, regulation, or order
requiring such permit;
(2) "Council", the state oil and gas council established by section
259.010;
(3) "Field", the general area underlaid by one or more pools;
(4) "Gas", all natural gas and all other fluid hydrocarbons which are
produced at the wellhead and not hereinbelow defined as oil;
(5) "Illegal gas" means gas which has been produced from any well within
this state in excess of the quantity permitted by any rule, regulation,
or order of the council;
(6) "Illegal oil" means oil which has been produced from any well within
the state in excess of the quantity permitted by any rule, regulation, or
order of the council;
(7) "Illegal product" means any product derived in whole or in part from
illegal oil or illegal gas;
(8) "Noncommercial gas well", a gas well drilled for the sole purpose of
furnishing gas for private domestic consumption by the owner and not for
resale or trade;
(9) "Oil", crude petroleum oil and other hydrocarbons regardless of
gravity which are produced at the wellhead in liquid form and the liquid
hydrocarbons known as distillate or condensate recovered or extracted
from gas, other than gas produced in association with oil and commonly
known as casinghead gas;
(10) "Owner", the person who has the right to drill into and produce from
a pool and to appropriate the oil or gas he produced therefrom either for
himself or others or for himself and others;
(11) "Pool", an underground reservoir containing a common accumulation of
oil or gas or both; each zone of a structure which is completely
separated from any other zone in the same structure is a "pool", as that
term is used in this chapter;
(12) "Producer", the owner of a well or wells capable of producing oil or
gas or both;
(13) "Product", any commodity made from oil or gas and includes refined
crude oil, crude tops, topped crude, processed crude, processed crude
petroleum, residue from crude petroleum, cracking stock, uncracked fuel
oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline,
natural-gas gasoline, kerosene, benzine, wash oil, waste oil, blended
gasoline, lubricating oil, blends or mixtures of oil with one or more
liquid products or by-products derived from oil or gas, and blends or
mixtures of two or more liquid products or by-products derived from oil
or gas whether hereinabove enumerated or not;
(14) "Reasonable market demand" means the demand for oil or gas for
reasonable current requirements for consumption and use within and
without the state, together with such quantities as are reasonably
necessary for building up or maintaining reasonable working stocks and
reasonable reserves of oil or gas or product;
(15) "Waste" means and includes:
(a) Physical waste, as that term is generally understood in the oil and
gas industry, but not including unavoidable or accidental waste;
(b) The inefficient, excessive, or improper use of, or the unnecessary
dissipation of, reservoir energy;
(c) The location, spacing, drilling, equipping, operating, or producing
of any oil or gas well or wells in a manner which causes, or tends to
cause, reduction in the quantity of oil or gas ultimately recoverable
from a pool under prudent and proper operations, or which causes or tends
to cause unnecessary or excessive surface loss or destruction of oil or
gas;
(d) The inefficient storing of oil;
(e) The production of oil or gas in excess of transportation or marketing
facilities or in excess of reasonable market demand; and
(f) Through negligence, the unnecessary or excessive surface loss or
destruction of oil or gas resulting from evaporation, seepage, leakage or
deliberate combustion;
(16) "Well", any hole drilled in the earth for or in connection with the
exploration, discovery, or recovery of oil or gas, or for or in
connection with the underground storage of gas in natural formation, or
for or in connection with the disposal of salt water, nonusable gas or
other waste accompanying the production of oil or gas. (L. 1965 2d Ex.
Sess. p. 917 § 5, A.L. 1972 H.B. 1176, A.L. 1987 S.B. 353)
Waste of oil and gas is prohibited in the interest of
conservation of natural resources. (L. 1965 2d Ex. Sess. p. 917 § 6, A.L.
1972 H.B. 1176)
1. The council has the duty of administering the provisions of
this chapter. The council has the duty and authority to make such
investigations as it deems proper to determine whether waste exists or is
imminent or whether other facts exist which justify action. The council
acting through the office of the state geologist has the authority:
(1) To require:
(a) Identification of ownership of oil or gas wells, producing leases,
tanks, plants, structures, and facilities for the refining or intrastate
transportation of oil and gas;
(b) The making and filing of all mechanical well logs and the filing of
directional surveys if taken, and the filing of reports on well location,
drilling and production, and the filing free of charge of samples and
core chips and of complete cores less tested sections, when requested in
the office of the state geologist within six months after the completion
or abandonment of the well;
(c) The drilling, casing, operation, and plugging of wells in such manner
as to prevent the escape of oil or gas out of one stratum into another;
the intrusion of water into oil or gas stratum; the pollution of fresh
water supplies by oil, gas, or highly mineralized water; to prevent
blowouts, cavings, seepages, and fires; and to prevent the escape of oil,
gas, or water into workable coal or other mineral deposits;
(d) The furnishing of a reasonable bond with good and sufficient surety,
conditioned upon the full compliance with the provisions of this chapter,
and the rules and regulations of the council prescribed to govern the
production of oil and gas on state and private lands within the state of
Missouri; provided that, in lieu of a bond with a surety, an applicant
may furnish to the council his own personal bond, on conditions as
described in this paragraph *, secured by a certificate of deposit or an
irrevocable letter of credit in an amount equal to that of the required
surety bond or secured by some other financial instrument on conditions
as above described or as provided by council regulations;
(e) That the production from wells be separated into gaseous and liquid
hydrocarbons, and that each be accurately measured by such means and upon
such standards as may be prescribed by the council;
(f) The operation of wells with efficient gas-oil and water-oil ratios,
and to fix these ratios;
(g) Certificates of clearance in connection with the transportation or
delivery of any native and indigenous Missouri produced crude oil, gas,
or any product;
(h) Metering or other measuring of any native and indigenous
Missouri-produced crude oil, gas, or product in pipelines, gathering
systems, barge terminals, loading racks, refineries, or other places; and
(i) That every person who produces, sells, purchases, acquires, stores,
transports, refines, or processes native and indigenous Missouri-
produced crude oil or gas in this state shall keep and maintain within
this state complete and accurate records of the quantities thereof, which
records shall be available for examination by the council or its agents
at all reasonable times and that every such person file with the council
such reports as it may prescribe with respect to such oil or gas or the
products thereof;
(2) To regulate pursuant to rules adopted by the council:
(a) The drilling, producing, and plugging of wells, and all other
operations for the production of oil or gas;
(b) The shooting and chemical treatment of wells;
(c) The spacing of wells;
(d) Operations to increase ultimate recovery such as cycling of gas, the
maintenance of pressure, and the introduction of gas, water, or other
substances into producing formations; and
(e) Disposal of highly mineralized water and oil field wastes;
(3) To limit and to allocate the production of oil and gas from any
field, pool, or area;
(4) To classify wells as oil or gas wells for purposes material to the
interpretation or enforcement of this chapter;
(5) To promulgate and to enforce rules, regulations, and orders to
effectuate the purposes and the intent of this chapter;
(6) To make rules, regulations, or orders for the classification of wells
as oil wells or dry natural gas wells; or wells drilled, or to be
drilled, for geological information; or as wells for secondary recovery
projects; or wells for the disposal of highly mineralized water, brine,
or other oil field wastes; or wells for the storage of dry natural gas,
or casinghead gas; or wells for the development of reservoirs for the
storage of liquid petroleum gas;
(7) To detail such personnel and equipment or enter into such contracts
as it may deem necessary for carrying out the plugging of or other
remedial measures on wells which have been abandoned and not plugged
according to the standards for plugging set out in the rules and
regulations promulgated by the council pursuant to this chapter. Members
of the council or authorized representatives may, with the consent of the
owner or person in possession, enter any property for the purpose of
investigating, plugging, or performing remedial measures on any well, or
to supervise the investigation, plugging, or performance of remedial
measures on any well. A reasonable effort to contact the owner or the
person in possession of the property to seek his permission shall be made
before members of the council or authorized representatives enter the
property for the purposes described in this paragraph *. If the owner or
person in possession of the property cannot be found or refuses entry or
access to any member of the council or to any authorized representative
presenting appropriate credentials, the council may request the attorney
general to initiate in any court of competent jurisdiction an action for
injunctive relief to restrain any interference with the exercise of
powers and duties described in this subdivision. Any entry authorized
under this subdivision shall be construed as an exercise of the police
power for the protection of public health, safety and general welfare and
shall not be construed as an act of condemnation of property nor of
trespass thereon. Members of the council and authorized representatives
shall not be liable for any damages necessarily resulting from the entry
upon land for purposes of investigating, plugging, or performing remedial
measures or the supervision of such activity. However, if growing crops
are present, arrangements for timing of such remedial work may be agreed
upon between the state and landowner in order to minimize damages;
(8) To develop such facts and make such investigations or inspections as
are consistent with the purposes of this chapter. Members of the council
or authorized representatives may, with the consent of the owner or
person in possession, enter upon any property for the purposes of
inspecting or investigating any condition which the council shall have
probable cause to believe is subject to regulation under this chapter,
the rules and regulations promulgated pursuant thereto or any permit
issued by the council. If the owner or person in possession of the
property refuses entry or access for purposes of the inspections or
investigations described, the council or authorized representatives shall
make application for a search warrant. Upon a showing of probable cause
in writing and under oath, a suitable restricted search warrant shall be
issued by any judge having jurisdiction for purposes of enabling
inspections authorized under this subdivision. The results of any
inspection or investigation pursuant to this subdivision shall be reduced
to writing with a copy furnished to the owner, person in possession, or
operator;
(9) To cooperate with landowners with respect to the conversion of wells
drilled for oil and gas to alternative use as water wells as follows: The
state geologist shall determine the feasibility of the conversion of a
well drilled under a permit for oil and gas for use as a water well and
shall advise the landowner of modifications required for conversion of
the well in a manner that is consistent with the requirements of this
chapter. If such conversion is carried out, release of the operator from
legal liability or other responsibility shall be required and the expense
of the conversion shall be borne by the landowner.
2. No rule or portion of a rule promulgated under the authority of this
chapter shall become effective unless it has been promulgated pursuant to
the provisions of section 536.024, RSMo. (L. 1965 2d Ex. Sess. p. 917 §
7, A.L. 1972 H.B. 1176, A.L. 1983 H.B. 37, A.L. 1987 S.B. 353, A.L. 1993
S.B. 52, A.L. 1995 S.B. 3)
*Word "above" appears in original rolls.
CROSS REFERENCE: Oil and gas council transferred to department of natural
resources, RSMo 640.010
It shall be unlawful to commence operations for the drilling of
a well for oil or gas, or to commence operations to deepen any well to a
different geological formation, without first giving the state geologist
notice of intention to drill and first obtaining a permit from the state
geologist under such rules and regulations as may be prescribed by the
council. (L. 1965 2d Ex. Sess. p. 917 § 8, A.L. 1972 H.B. 1176)
The council shall determine market demand for each marketing
district and shall regulate the amount of production as follows:
(1) The council shall limit the production of oil and gas within each
marketing district to that amount which can be produced without waste,
and which does not exceed the reasonable market demand.
(2) Whenever the council limits the total amount of oil or gas which may
be produced in the state or a marketing district, the council shall
allocate or distribute the allowable production among the pools therein
on a reasonable basis, giving, where reasonable under the circumstances
to each pool with small wells of settled production, an allowable
production which prevents the general premature abandonment of such wells
in the pool.
(3) Whenever the council limits the total amount of oil or gas which may
be produced in any pool in this state to an amount less than that amount
which the pool could produce if no restriction was imposed, regardless of
whether or not the limitation is imposed in relation to the limitation on
the total amount of oil or gas produced in the marketing district wherein
the pool is located, the council shall allocate or distribute the
allowable production among the several wells or producing properties in
the pool on a reasonable basis, preventing or minimizing reasonable
avoidable drainage, so that each property will have the opportunity to
produce or to receive its just and equitable share, subject to the
reasonable necessities for the prevention of waste.
(4) In allocating the market demand for gas as between pools within
marketing districts, the council shall give due regard to the fact that
gas produced from oil pools is to be regulated in a manner as will
protect the reasonable use of its energy for oil production.
(5) The council shall not be required to determine the reasonable market
demand applicable to any single pool, except in relation to all other
pools within the same marketing district, and in relation to the demand
applicable to the marketing district. In allocating allowables to pools,
the council may consider, but shall not be bound by, nominations of
purchasers to purchase from particular fields, pools, or portions
thereof. The council shall allocate the total allowable for the state in
such manner as prevents undue discrimination between marketing districts,
fields, pools, or portions thereof resulting from selective buying or
nomination by purchasers. (L. 1965 2d Ex. Sess. p. 917 § 9)
1. The council shall set spacing units as follows:
(1) When necessary to prevent waste, to avoid the drilling of unnecessary
wells, or to protect correlative rights, the council shall establish
spacing units for a pool. Spacing units when established shall be of
uniform size and shape for the entire pool, except that when found to be
necessary for any of the purposes above mentioned, the council is
authorized to divide any pool into zones and establish spacing units for
each zone, which units may differ in size and shape from those
established in any other zone;
(2) The size and shape of spacing units are to be such as will result in
the efficient and economical development of the pool as a whole;
(3) An order establishing spacing units for a pool shall specify the size
and shape of each unit and the location of the permitted well thereon in
accordance with a reasonably uniform spacing plan. Upon application, if
the state geologist finds that a well drilled at the prescribed location
would not produce in paying quantities, or that surface conditions would
substantially add to the burden or hazard of drilling such well, the
state geologist is authorized to enter an order permitting the well to be
drilled at a location other than that prescribed by such spacing order;
however, the state geologist shall include in the order suitable
provisions to prevent the production from the spacing unit of more than
its just and equitable share of the oil and gas in the pool;
(4) An order establishing units for a pool shall cover all lands
determined or believed to be underlaid by such pool, and may be modified
by the state geologist from time to time to include additional areas
determined to be underlaid by such pool. When found necessary for the
prevention of waste, or to avoid the drilling of unnecessary wells or to
protect correlative rights, an order establishing spacing units in a pool
may be modified by the state geologist to increase the size of spacing
units in the pool or any zone thereof, or to permit the drilling of
additional wells on a reasonable uniform plan in the pool, or any zone
thereof. Orders of the state geologist may be appealed to the council
within thirty days.
2. The provisions of subsection 1 of this section shall not apply to
noncommercial gas wells.
3. Applicants seeking a permit for a noncommercial gas well shall file a
bond or other instrument of credit acceptable to the council equal to the
greater of three hundred dollars or one dollar and fifty cents per well
foot and meet the following conditions and procedures: an owner of a
noncommercial gas well with drilling rights may apply for the
establishment of a drilling unit containing no less than three acres,
with a well set back of one hundred sixty-five feet on which a well no
deeper than eight hundred feet in depth may be drilled. An owner may
apply to the council for a variance to establish a drilling unit of less
than three acres and/or less than one hundred sixty-five feet set back.
(L. 1965 2d Ex. Sess. p. 917 § 10, A.L. 1987 S.B. 353)
1. When two or more separately owned tracts are embraced within
a spacing unit, or when there are separately owned interests in all or a
part of the spacing unit, then the owners and royalty owners thereof may
pool their interests for the development and operation of the spacing
unit. In the absence of voluntary pooling the council, upon the
application of any interested person, shall enter an order pooling all
interests in the spacing unit for the development and operations thereof.
Each such pooling order shall be made after notice and hearing, and shall
be upon terms and conditions that are just and reasonable, and that
afford to the owner of each tract or interest in the spacing unit the
opportunity to recover or receive, without unnecessary expense, his just
and equitable share. Operations incident to the drilling of a well upon
any portion of a spacing unit covered by a pooling order shall be deemed
for all purposes the conduct of such operations upon each separately
owned tract in the drilling unit by the several owners thereof. That
portion of the production allocated to each tract included in a spacing
unit covered by a pooling order shall, when produced, be deemed for all
purposes to have been produced from such tract by a well drilled thereon.
2. Each pooling order shall make provision for the drilling and operation
of a well on the spacing unit, and for the payment of the reasonable
actual cost thereof by the owners of interests in the spacing unit, plus
a reasonable charge for supervision. In the event of any dispute as to
such costs the council shall determine the proper costs. If one or more
of the owners shall drill and operate, or pay the expenses of drilling
and operating the well for the benefit of others, then the owner or
owners so drilling or operating shall, upon complying with the terms of
section 259.130, have a lien on the share of production from the spacing
unit accruing to the interest of each of the other owners for the payment
of his proportionate share of such expenses. All the oil and gas subject
to the lien shall be marketed and sold and the proceeds applied in
payment of the expenses secured by such lien as provided for in section
259.100. (L. 1965 2d Ex. Sess. p. 917 § 11)
1. A voluntary agreement for the unit or cooperative development
and operation of a field or pool, in connection with the conduct of
repressuring or pressure maintenance operations, cycling or recycling
operations, including the extraction and separation of liquid
hydrocarbons from natural gas in connection therewith, or any other
method of operation, including selective production methods, injection of
water or other fluids, and including but not limited to thermal or
combustion processes, is authorized and may be performed and shall not be
held or construed to violate any of the statutes of this state relating
to trusts, monopolies, or contracts and combinations in restraint of
trade, if the agreement is approved by the council as being in the public
interest, protective of correlative rights, and reasonably necessary to
increase ultimate recovery or to prevent waste of oil or gas. Such
voluntary agreements bind only the persons who execute them, and their
heirs, successors, assigns, and legal representatives.
2. Where a unit or cooperative plan of development and operation has been
submitted to the owners of interests in a field or pool and one or more
of such owners fails or refuses to execute the applicable unit agreements
for such plan, then, upon the filing of a petition as hereinafter
provided, the council, after notice, shall hold a public hearing to
consider the need for the operation as a unit of an entire pool, or any
portion thereof, to prevent waste, to increase ultimate recovery of oil
and gas and to protect correlative rights. The petition shall contain the
following:
(1) A description of the proposed unit area;
(2) A statement of the nature of the proposed unit operation;
(3) Conformed copies of the applicable unit agreements, which may be
composites of executed counterparts. The petition may be filed by any one
or more of the owners who have executed the applicable unit agreements.
3. If, after hearing and considering the petition and evidence offered in
support thereof, the council finds that:
(1) The proposed unit plan has been agreed to by persons, who, at the
time of filing of the petition, owned of record legal title to at least
seventy-five percent interest in the right to drill into and produce oil
and gas from the total proposed unit area and by persons, who, at that
time, owned of record legal title to at least seventy-five percent of
production payments, royalty and overriding royalty payable with respect
to oil and gas produced from the total proposed unit area, and that
(2) Unit operation of the pool, or any portion thereof, proposed to be
unitized, is reasonably necessary to prevent waste, to increase ultimate
recovery of oil and gas and to protect correlative rights, and that
(3) The value of the additional oil and gas to be recovered from the
proposed unit area as a result of the proposed unit operation will exceed
the additional cost incident to conducting such operation, it shall issue
an order requiring unit operation in accordance with the terms of the
applicable unit operating agreements. Such order and the unit plan shall,
thereafter, be effective as to and binding upon each person owning an
interest in the unit area, or in oil and gas produced therefrom or the
proceeds thereof.
4. The order requiring unit operation shall be fair and reasonable under
all circumstances and shall include:
(1) A description of the unit area;
(2) An allocation, upon the basis agreed upon by the provisions of the
unit applicable agreements, and found by the council to be fair and
equitable to each separately owned tract in the unit area, in that under
the allocation each separately owned tract receives its fair share of all
of the oil and gas produced from the unit area and not required or
consumed in the conduct of the operation of the unit area or unavoidably
lost;
(3) A provision for the credits and charges to be made in the adjustment
among the owners of the unit area for their respective investments in
wells, tanks, pumps, machinery, materials and equipment contributed to
the unit operation. The net amount charged against the owner or owners of
a separately owned tract shall be considered expenses of unit operation
chargeable against such tract;
(4) A provision that a part of the expenses of unit operation, including
capital investments, be charged to each separately owned tract in the
same proportion that the tract shares in the unit production. The
expenses chargeable to a tract shall be paid by the person or persons
who, in the absence of unit operation, would be responsible for the
expense of developing and operating such tract;
(5) Designation of the unit operator and the time at which the unit
operation shall commence; and
(6) Those additional provisions, not in conflict with, or inconsistent
with, the applicable unit agreements, which the council determines to be
appropriate for the prevention of waste and the protection of all
interested parties.
5. The obligation or liability of each owner in the several separately
owned tracts for the payment of unit expense shall at all times be
several and not joint or collective and in no event shall an owner of the
oil and gas rights in the separately owned tract be chargeable with,
obligated or liable, directly or indirectly, for, more than the amount
apportioned, assessed or otherwise charged to his interest in such
separately owned tract pursuant to the plan of unitization.
6. The council, upon the filing of a petition in a form complying with
the requirements of subsection 2 of this section, may, after notice and
hearing, require unit operation of a pool, or portion thereof, when the
unit area newly established embraces a unit area within the same pool
established by a previous order of the council. In each such case the
petition shall be accompanied by a copy of the proposed unit agreements
with respect to the operation of the unit as so enlarged, in the form
meeting the requirements of subdivision (3) of subsection 2 of this
section. In each such instance the proposed unit agreements shall be
executed by persons owning interests in oil and gas in the entire
unitized area so enlarged in sufficient numbers to comply with the
requirements of subdivision (1) of subsection 3 of this section; provided
that, if the unit agreements then in effect with respect to the unit area
to which an additional portion of a pool is to be added contain
provisions, under the terms of which additions to the unit area may be
made, the application for such enlargement of the unitized area need only
be accompanied by an agreement, executed by persons owning interests in
oil and gas under the area to be added to the unit area in numbers
sufficient to comply with the requirements of subdivision (1) of
subsection 3 of this section, for the inclusion, in accordance with the
plan provided in the unit agreements involved, of the additional area to
the unit area then existing. In either such case, such new order, in
providing for allocation of unit production from the enlarged unit area,
shall first treat the unit area previously established as a single tract,
and the portion of unit production so allocated thereto shall then be
allocated among the separately owned tracts included in such previously
established unit area in the same proportion as those specified therefor
in the previous order. In no event shall said new order alter the
relative values of tract factors of the previously established unit area,
except by consent of all parties owning interests in the tract affected.
7. An order of the council entered under subsection 6 shall be effective
as to the enlarged unit area and to all persons owning interests in oil
and gas therein to the same extent as an order entered under subsection
3, shall contain provisions with respect to the enlarged unit area to
meet the requirements of subsection 4, and the provisions of subsections
5 and 6 shall be applicable to obligations incurred in the operation of
the enlarged unit area.
8. The portion of oil and gas produced from the unit area and allocated
to a separately owned tract shall be deemed, for all purposes, to have
been actually produced from such tract, and operations for the production
of oil and gas from any part of the unit area, conducted pursuant to the
order of the council, shall be deemed, for all purposes, to be operations
for the production of oil and gas from each separately owned tract in the
unit area.
9. The formation of such a unit as provided for in subsections 2 through
9 of this section and the operation of the unit under order of the
council shall not be a violation of any statute of this state relating to
trusts, monopolies, contracts or combinations in restraint of trade. (L.
1965 2d Ex. Sess. p. 917 § 12, A.L. 1972 S.B. 431, H.B. 1176)
A person to whom another is indebted for expenses incurred in
drilling and operating a well on a drilling unit required to be formed as
provided for in section 259.110, may, in order to secure payment of the
amount due, fix a lien upon the interest of the debtor in the production
from the drilling unit or the unit area, as the case may be, by filing
for record, with the recorder of deeds of the county where the property
involved, or any part thereof, is located, an affidavit setting forth the
amount due and the interest of the debtor in such production. The person
to whom the amount is payable may, at the expense of the debtor, store
all or any part of the production upon which the lien exists until the
total amount due, including reasonable storage charges, is paid or the
commodity is sold at foreclosure sale and delivery is made to the
purchaser. The lien may be foreclosed as provided for with respect to
foreclosure of a lien on chattels. (L. 1965 2d Ex. Sess. p. 917 § 13)
1. The council shall prescribe rules and regulations governing
the practice and procedure before it.
2. No order, or amendment thereof, except in an emergency, shall be made
by the council without a public hearing upon at least ten days' notice.
The public hearing shall be held at such time and place as may be
prescribed by the council, and any interested person shall be entitled to
be heard.
3. When an emergency requiring immediate action is found to exist the
council is authorized to issue an emergency order without notice of
hearing, which shall be effective upon promulgation. No emergency order
shall remain effective for more than fifteen days.
4. Any notice required by this chapter shall be given at the election of
the council either by personal service or by letter to the last recorded
address of the person to whom the order is directed and one publication
in a newspaper of general circulation in the county where the land
affected, or some part thereof, is situated. If the notice is applicable
throughout the state, then it shall be published in a newspaper of
general circulation which is published in Jefferson City. The notice
shall issue in the name of the state, shall be signed by the state
geologist, shall specify the style and number of the proceeding, the time
and place of the hearing, and shall briefly state the purpose of the
proceeding. Should the council elect to give notice by personal service,
such service may be made by any officer authorized to serve process, or
by any agent of the council, in the same manner as is provided by law for
the service of original notices in civil actions in the circuit courts of
the state. Proof of the service by such agent shall be by the affidavit
of the person making personal service.
5. All orders issued by the council shall be in writing, shall be entered
in full and indexed in books to be kept by the state geologist for that
purpose, and shall be public records open for inspection at all times
during reasonable office hours. A copy of any rule, regulation, or order
certified by the state geologist or any officer of the council shall be
received in evidence in all courts of this state with the same effect as
the original.
6. The council may act upon its own motion, or upon the petition of any
interested person. On the filing of a petition concerning any matter
within the jurisdiction of the council, the council shall promptly fix a
date for a hearing thereon, and shall cause notice of the hearing to be
given. The hearing shall be held without undue delay after the filing of
the petition. The council shall enter its order within thirty days after
the hearing. In the event that the matter is submitted on a question or
questions of fact, the council shall enter its order within thirty days
after the finding of facts is submitted to the council. (L. 1965 2d Ex.
Sess. p. 917 § 14)
1. Whenever either party to a contested matter avers that there
is a question or questions of fact involved, the matter shall be
submitted to the public service commission for hearing on the question or
questions of fact.
2. The rules and regulations governing practice before the public service
commission shall be in effect on such hearing to determine a question or
questions of fact.
3. Costs in said action may be set and taxed by the commission as it may
see fit. (L. 1965 2d Ex. Sess. p. 917 § 15)
Any person adversely affected by any order of the council may
within thirty days after its effective date apply to the council in
writing for a rehearing. The application for rehearing shall be acted
upon within fifteen days after its filing, and if granted, the rehearing
shall be held without undue delay. (L. 1965 2d Ex. Sess. p. 917 § 16)
1. Any person adversely affected by an order entered by the
council may appeal from such order to the circuit court of Cole County or
to the circuit court of any county in which the property affected or some
portion thereof is located. Notice of appeal must be filed with the
council within thirty days after the entry of the order complained of, or
within thirty days after the entry of the order overruling a motion for
rehearing, or within thirty days after sustaining the original order in
the event a rehearing has been held. The notice of appeal must identify
the order complained of and the grounds for appeal. The appellant shall
file a copy of the transcript of the hearing or rehearing before the
council as hereinafter provided, and the appellant shall provide the
transcript at his expense. The transcript shall be delivered to the
appellant, or his designated attorney, within sixty days after the filing
of the notice of appeal.
2. Within ninety days after the filing of the notice of appeal, the
appellant must file in the circuit court the transcript of the
proceedings before the council, together with a petition for review which
states briefly the grounds for the appeal. An appeal shall be perfected
by filing the notice of appeal within the specified thirty day period.
The appeal may be dismissed by the circuit court for failure of the
appellant to file the transcript and petition for review within the time
specified, unless for good cause shown the time is extended by order of
the circuit court.
3. At the time of filing of the notice of appeal, if an application for
the suspension of the order is filed, the council shall enter an order
fixing the amount of the supersedeas bond. Within ten days after the
entry of an order by the council which fixes the amount of the bond, the
appellant must file with the council a supersedeas bond in the required
amount and with proper surety; upon approval of the bond, the council
shall suspend the order complained of until its final disposition upon
appeal. The bond shall run in favor of the state for the use and benefit
of any person who may suffer damage by reason of the suspension of the
order in the event the same is affirmed by the circuit court. If the
order of the council is not superseded, it shall continue in force and
effect as if no appeal was pending.
4. The circuit court shall, insofar as is practicable, give precedence to
appeals from orders of the council. Upon the appeal of such an order the
circuit court shall review the proceedings before the council as
disclosed by the transcript upon appeal, and thereafter enter its
judgment affirming or reversing the order appealed. Orders of the council
shall be sustained if the council has regularly pursued its authority and
its findings and conclusions are sustained by the law and by substantial
and credible evidence. (L. 1965 2d Ex. Sess. p. 917 § 17)
The sale, purchase, acquisition, transportation, refining,
processing, or handling of illegal oil, illegal gas, or illegal product
is hereby prohibited. However, no penalty by way of fine shall be imposed
upon a person who sells, purchases, acquires, transports, refines,
processes, or handles illegal oil, illegal gas, or illegal product unless:
(1) Such person knows, or is put on notice, of facts indicating that
illegal oil, illegal gas, or illegal product is involved; or
(2) Such person fails to obtain a certificate of clearance with respect
to such oil, gas, or product where prescribed by order of the council, or
fails to follow any other method prescribed by an order of the council
for the identification of such oil, gas or product. (L. 1965 2d Ex. Sess.
p. 917 § 18)
1. Illegal oil, illegal gas, and illegal product are declared to
be contraband and are subject to seizure and sale as herein provided;
seizure and sale to be in addition to any and all other remedies and
penalties provided in this chapter for violations relating to illegal
oil, illegal gas, or illegal product. Whenever the council believes that
any oil, gas or product is illegal, the council, acting by the attorney
general, shall bring a civil action in rem in the circuit court of the
county where such oil, gas, or product is found, to seize and sell the
same, or the council may include such an action in rem for the seizure
and sale of illegal oil, illegal gas, or illegal product in any suit
brought for an injunction or penalty involving illegal oil, illegal gas,
or illegal product. Any person claiming an interest in oil, gas, or
product affected by any such action shall have the right to intervene as
an interested party in such action.
2. Actions for the seizure and sale of illegal oil, illegal gas, or
illegal product shall be strictly in rem, and shall proceed in the name
of the state as plaintiff against the illegal oil, illegal gas, or
illegal products as defendant. No bond or similar undertaking shall be
required of the plaintiff. Upon the filing of the petition for seizure
and sale, the attorney general shall issue a notice, with a copy of the
complaint attached thereto, which shall be served in the manner provided
for service of original notices in civil actions, upon any and all
persons having or claiming any interest in the illegal oil, illegal gas,
or illegal products described in the petition. Service shall be completed
by the filing of an affidavit by the person making the service, stating
the time and manner of making such service. Any person who fails to
appear and answer within the period of thirty days shall be forever
barred by the judgment based on such service. If the court, on a properly
verified petition, or affidavits, or oral testimony, finds that grounds
for seizure and for sale exist, the court shall issue an immediate order
of seizure, describing the oil, gas, or product to be seized and
directing the sheriff of the county to take such oil, gas, or product
into his custody, actual or constructive, and to hold the same subject to
the further order of the court. The court, in such order of seizure, may
direct the sheriff to deliver the oil, gas, or product seized by him
under the order to an agent appointed by the court as the agent of the
court; such agent to give bond in an amount and with such surety as the
court may direct, conditioned upon his compliance with the orders of the
court concerning the custody and disposition of such oil, gas, or product.
3. Any person having an interest in oil, gas, or product described in an
order of seizure and contesting the right of the state to the seizure and
sale thereof may, prior to the sale thereof as herein provided, obtain
the release thereof, upon furnishing bond to the sheriff, approved by the
court, in an amount equal to one hundred fifty percent of the market
value of the oil, gas, or product to be released, and conditioned as the
court may direct upon redelivery to the sheriff of such product released
or upon payment to the sheriff of the market value thereof as the court
may direct, if and when ordered by the court, and upon full compliance
with the further orders of the court.
4. If the court, after a hearing upon a petition for the seizure and sale
of oil, gas, or product, finds that such oil, gas, or product is
contraband, the court shall order the sale thereof by the sheriff in the
same manner and upon the same notice of sale as provided by law for the
sale of personal property on execution of judgment entered in a civil
action except that the court may order that the illegal oil, illegal gas,
or illegal product be sold in specified lots or portions and at specified
intervals. Upon such sale, title to the oil, gas, or product sold shall
vest in the purchaser free of the claims of any and all persons having
any title thereto or interest therein at or prior to the seizure thereof,
and the same shall be legal oil, legal gas, or legal product, as the case
may be, in the hands of the purchaser.
5. All proceeds derived from the sale of illegal oil, illegal gas, or
illegal product, as above provided, after payment of costs of suit and
expenses incident to the sale, all amounts obtained by the council from
the forfeiture of surety or personal bonds required under paragraph (d)
of subdivision (1) of section 259.070, and any money recovered under
subsection 1 of section 259.200 shall be paid to the state treasurer and
credited to the "Oil and Gas Remedial Fund", which is hereby created. The
money in the oil and gas remedial fund may be used by the council to pay
for the plugging of, or other remedial measures on, wells and to pay the
expenses incurred by the council in performing the duties imposed on it
by this chapter. Any unexpended balance in the fund at the end of the
fiscal year not exceeding fifty thousand dollars is exempt from the
provisions of section 33.080, RSMo, relating to transfer of unexpended
balances to the ordinary revenue funds. (L. 1965 2d Ex. Sess. p. 917 §
19, A.L. 1983 H.B. 37)
1. Any person who violates any provision of this chapter, or any
rule, regulation, or order of the council shall be subject to a penalty
of not more than one thousand dollars for each act of violation and for
each day that such violation continues, unless the penalty for such
violation is otherwise specifically provided for and made exclusive in
this chapter.
2. If any person, for the purpose of evading this chapter, or any rule,
regulation, or order of the council, shall make or cause to be made any
false entry or statement in a report required by this chapter or by any
such rule, regulation, or order, or shall make or cause to be made any
false entry in any record, account, or memorandum required by this
chapter, or by any such rule, regulation, or order, or shall omit, or
cause to be omitted, from any such record, account, or memorandum, full,
true, and correct entries as required by this chapter, or by any such
rule, regulation, or order, or shall remove from this state or destroy,
mutilate, alter or falsify any such record, account, or memorandum, such
person shall be guilty of a misdemeanor and upon conviction shall be
punished as provided by law.
3. Any person knowingly aiding or abetting any other person in the
violation of any provision of this chapter, or any rule, regulation, or
order of the council shall be subject to the same penalty as that
prescribed by this chapter for the violation by such other person.
4. The penalties provided in this section shall be recoverable by suit
filed by the attorney general in the name and on behalf of the council,
in the circuit court of the county in which the defendant resides, or in
which any defendant resides, if there be more than one defendant, or in
the circuit court of any county in which the violation occurred. The
payment of any such penalty shall not operate to legalize any illegal
oil, illegal gas, or illegal product involved in the violation for which
the penalty is imposed, or to relieve a person on whom the penalty is
imposed from liability to any other person for damages arising out of
such violation. (L. 1965 2d Ex. Sess. p. 917 § 20)
1. Whenever it appears that any person is violating or
threatening to violate any provision of this chapter, or any rule,
regulation, or order of the council, the council shall bring suit against
such person in the circuit court of any county where the violation occurs
or is threatened, to restrain such person from continuing the violation
or from carrying out the threat of violation. In any such suit, the court
shall have jurisdiction to grant to the council, without bond or other
undertaking, such prohibitory and mandatory injunctions as the facts may
warrant, including temporary restraining orders, preliminary injunctions,
temporary, preliminary, or final orders restraining the movement or
disposition of any illegal oil, illegal gas, or illegal product, any of
which the court may order to be impounded or placed in the custody of an
agent appointed by the court.
2. If the council shall fail to bring suit to enjoin a violation or a
threatened violation of any provision of this chapter, or any rule,
regulation, or order of the council, within ten days after receipt of
written request to do so by any person who is or will be adversely
affected by such violation, the person making such request may bring suit
in his own behalf to restrain such violation or threatened violation in
any court in which the council might have brought suit. The council shall
be made a party defendant in such suit in addition to the person
violating or threatening to violate a provision of this chapter, or a
rule, regulation, or order of the council, and the action shall proceed
and injunctive relief may be granted to the council or the petitioner
without bond in the same manner as if suit had been brought by the
council. (L. 1965 2d Ex. Sess. p. 917 § 21)
All rights and interests in or to oil, gas or other minerals
underlying land, whether created by or arising under deed, lease,
reservation of rights, or otherwise, which rights or interests are owned
by any person other than the owner of the land, shall be assessed and
taxed separately to the owner of such rights or interests in the same
manner as other real estate. The taxes on such rights or interests which
are not owned by the owner of the land shall not be a lien on the land.
(L. 1965 2d Ex. Sess. p. 917 § 22)
The state, counties, cities and towns and other political
subdivisions are hereby authorized to lease publicly owned lands under
their respective jurisdictions for the purpose of oil or gas exploration
and production. No such lease shall be entered into until it has been
approved by the general assembly on behalf of the state; on behalf of
counties by the county commission; on behalf of cities and towns by the
council thereof and on behalf of other political subdivisions by the
governing body thereof. Such leases shall be upon such terms and
conditions as may be agreed upon. All revenue derived from the leasing of
state owned lands shall be paid into the general fund of the state. All
revenue derived from the leasing of other public lands shall be paid into
the general fund of the respective lessor political subdivision. (L. 1965
2d Ex. Sess. p. 917 § 23)
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