USA Statutes : oregon
Title : TITLE 41 WILDLIFE
Chapter : Chapter 520 Conservation of Gas and Oil
As used in this chapter, unless the context
requires otherwise:

(1) “And” includes “or” and “or” includes “and.”

(2) “Board” means the governing board of the State Department of
Geology and Mineral Industries.

(3) “Condensate” means liquid hydrocarbons that were originally in
the gaseous phase in the reservoir.

(4) “Field” means the general area underlaid by one or more pools.

(5) “Gas” means all natural gas and all other fluid hydrocarbons
not defined as oil in subsection (6) of this section, including
condensate originally in the gaseous phase in the reservoir.

(6) “Oil” means crude petroleum oil and all other hydrocarbons,
regardless of gravity, which are produced in liquid form by ordinary
production methods, but does not include liquid hydrocarbons that were
originally in a gaseous phase in the reservoir.

(7) “Person” means any natural person, partnership, corporation,
association, receiver, trustee, guardian, fiduciary, executor,
administrator, representative of any kind, or the State of Oregon and any
of its political subdivisions, boards, agencies or commissions.

(8) “Pool” means an underground reservoir containing a common
accumulation of oil and natural gas. A zone of a structure which is
completely separated from any other zone in the same structure is a pool.

(9) “Owner” means a person who has the right to drill into and to
produce from any pool and to appropriate the oil or gas produced
therefrom either for others, for the person or for the person and others.

(10) “Producer” means the owner of one or more wells capable of
producing oil or gas or both.

(11) “Protect correlative rights” means that the action or
regulation by the board affords a reasonable opportunity to each person
entitled thereto to recover or receive the oil or gas in the tract or
tracts of the person or the equivalent thereof, without being required to
drill unnecessary wells or to incur other unnecessary expense to recover
or receive such oil or gas or its equivalent.

(12) “Unit area” means one or more pools or parts thereof under
unit operation pursuant to ORS 520.260 to 520.330 and 520.230 (2).

(13) “Well” means a well drilled in search of oil or gas, but shall
not include core test wells, stratigraphic test wells, seismic test wells
or wells drilled for information purposes only as distinguished from
wells drilled for the purpose of producing oil or gas if found.

(14) “Underground reservoir” means any subsurface sand, strata,
formation, aquifer, cavern or void whether natural or artificially
created, suitable for the injection and storage of natural gas therein
and the withdrawal of natural gas therefrom, but excluding a pool.

(15) “Underground storage” means the process of injecting and
storing natural gas within and withdrawing natural gas from an
underground reservoir. [1953 c.667 §1; 1961 c.671 §15; 1973 c.276 §1;
1977 c.296 §1] “Waste,” in addition to its ordinary
meaning, means “physical waste” as that term is generally understood in
the petroleum industry. It includes:

(1) Underground waste and the inefficient, excessive or improper
use or dissipation of reservoir energy, including gas energy and water
drive, of any pool, and the locating, spacing, drilling, equipping,
operating or producing of any oil well or gas well in a manner that
results or tends to result in reducing the quantity of oil or gas
ultimately recoverable from any pool; and

(2) Surface waste and the inefficient storing of oil and the
locating, spacing, drilling, equipping, operating or producing of oil
wells or gas wells in a manner causing or tending to cause unnecessary or
excessive surface loss or destruction of oil or gas. [1953 c.667 §2; 1999
c.59 §164](1) No person proposing to drill any well for
oil or gas or proposing to drill or use any well for underground storage
of gas in an underground reservoir shall commence the drilling or use
until the person has applied to the State Geologist upon a form
prescribed by the State Geologist for a permit to operate the well, paid
to the governing board of the State Department of Geology and Mineral
Industries a nonrefundable fee set by the board not to exceed $250 for
each such application, posted any bond that may be required pursuant to
ORS 520.095 (1) and obtained the permit to drill the well pursuant to
subsection (5) of this section. A permit shall remain valid for one year
from the date it is issued.

(2) An unused permit may be extended by the State Geologist for a
reasonable period not to exceed one additional year beyond the initial
one-year period, upon receipt of a written request from the permittee
before the expiration date of the permit. The request shall be
accompanied by a nonrefundable fee set by the board not to exceed $250.

(3) The permittee shall provide an annual nonrefundable fee set by
the board not to exceed $500 on or before the anniversary of the issuance
date of each active permit.

(4) The State Geologist shall require that the form indicate:

(a) The location of the well.

(b) The name and address of the mineral owner, surface owner,
operator and any other person responsible for the conduct of the drilling
operations.

(c) The elevation of the well above sea level.

(d) Such information as is necessary to determine whether the
method of drilling and equipment to be used in drilling the well comply
with applicable laws and rules.

(e) Such other relevant information as the State Geologist deems
reasonably necessary to effectuate the purpose of this chapter.

(5)(a) If upon receipt of the application the State Geologist
determines that the method and equipment to be used by the applicant in
drilling or using the well comply with applicable laws and rules, the
State Geologist shall issue the permit.

(b) The State Geologist may refuse to issue a permit or revoke a
permit issued pursuant to this subsection if the State Geologist
determines that methods or equipment to be used or being used in drilling
or using the well do not comply with applicable laws or rules.

(6) All moneys paid to the department under this section shall be
deposited with the State Treasurer and are continuously appropriated to
the department for the administration of ORS 520.025, 520.095, 520.145
and 520.210. [1953 c.667 §5; 1973 c.276 §2; 1977 c.296 §3; 1981 c.146 §1;
1991 c.526 §1] The waste of oil and gas,
as defined in ORS 520.015, hereby is prohibited. [1953 c.667 §3] The governing board
of the State Department of Geology and Mineral Industries shall make such
inquiries as it may think proper to determine whether or not waste over
which it has jurisdiction exists or is imminent. In the exercise of such
power the board may:

(1) Collect data.

(2) Make investigations and inspections.

(3) Examine properties, leases, papers, books and records,
including drilling records and logs.

(4) Examine, check, test and gauge oil and gas wells and tanks.

(5) Hold hearings.

(6) Provide for the keeping of records and the making of reports.

(7) Take such action as may be reasonably necessary to enforce this
chapter. [1953 c.667 §6](1) The governing board of the State Department of Geology and
Mineral Industries has jurisdiction and authority over all persons and
property necessary to enforce effectively this chapter and all other laws
relating to the conservation of oil and gas.

(2) In addition to and not in lieu of any other powers granted
under this chapter, the State Department of Geology and Mineral
Industries and its governing board may in compliance with ORS 520.105
promulgate reasonable rules, regulations and orders necessary to regulate
geological, geophysical and seismic surveys on, and operations to remove
oil, gas and sulphur from the tidal submerged and submersible lands of
this state under ORS 274.705 to 274.860. [1953 c.667 §4; subsection (2)
enacted as 1961 c.619 §40; 1969 c.594 §57]The governing board of the State Department of
Geology and Mineral Industries may make, in compliance with ORS chapter
183, such reasonable rules and orders as may be necessary in the proper
administration and enforcement of this chapter, including rules and
orders for the following purposes:

(1) To require the drilling, casing and plugging of wells to be
done in such a manner as to prevent the escape of oil or gas out of one
stratum to another; to prevent the intrusion of water into oil or gas
strata; to prevent the pollution of fresh water supplies by oil, gas or
salt water; and to require reasonable bond conditioned upon compliance
with applicable laws and rules and upon the performance of the duty to
plug each dry or abandoned well.

(2) To compel the filing of logs, including electrical logs, if any
are taken, drilling records, typical drill cuttings or cores, if cores
are taken, in the office of the State Geologist within 20 days from the
date of completion or abandonment of any well. For a period of two years
from the date of abandonment or completion, such logs or other records or
drill cuttings or cores shall be kept confidential and shall not be
accessible to public inspection. However, the two-year confidentiality
period may be extended for such time as the State Geologist determines is
necessary for the reasonable protection of the economic interests of the
person who has engaged in the drilling activity.

(3) To prevent wells from being drilled, operated and produced in
such a manner as to cause injury to neighboring leases or property.

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

(5) To require the operation of wells with efficient gas-oil
ratios, and to fix ratios.

(6) To prevent blowouts, caving and seepage in the same sense that
conditions indicated by such terms are generally understood in the oil
and gas business.

(7) To prevent fires.

(8) To identify the ownership of all oil and gas wells, producing
leases, tanks, plants, structures and all storage equipment and
facilities.

(9) To regulate the “shooting” and chemical treatment of wells.

(10) To regulate secondary recovery methods, including the
introduction of gas, air, water or other substance into producing
formations.

(11) To regulate the spacing of wells.

(12) To require the filing currently of information as to the
volume of oil and gas, or either of them, produced and saved from the
respective properties.

(13) To require a permit issued by the State Geologist for the
drilling of stratigraphic test wells, core test wells, seismic test wells
or other wells drilled only for information purposes, giving the location
thereof, and to require the filing with the State Geologist of a plugging
report within 90 days after completion of such well. A reasonable fee,
not to exceed $100, set by rule may be required in connection with the
filing of an application for a permit. The State Geologist may require
reasonable bond or other financial assurance acceptable to the State
Geologist and conditioned upon compliance with applicable laws and rules
and upon the performance of the duty to reasonably protect ground water.
The board shall consult with the Water Resources Commission when
developing rules for drilling and abandonment of stratigraphic test
wells, core test wells, seismic test wells or other wells as described in
this subsection. Wells included in this subsection may be converted to
water wells, provided the conversion conforms with ORS 537.747 to 537.780.

(14) To require the disposal of salt water and oil field waste so
as not to damage land or property unnecessarily.

(15) To require that wells drilled for oil or gas be logged
adequately enough to identify the geologic formations penetrated by the
wells.

(16) To regulate the underground storage of natural gas and the
drilling and operation of any wells required therefor.

(17) To require the reclamation of drill sites and the filling of
sumps for beneficial subsequent use. [1953 c.667 §7; 1961 c.671 §18; 1973
c.276 §3; 1977 c.296 §2; 1981 c.146 §2; 1989 c.365 §1] (1) The governing board of
the State Department of Geology and Mineral Industries shall, in
accordance with ORS chapter 183, from time to time prescribe reasonable
rules governing practice and procedure before it.

(2) No rule, regulation or order, except in emergency, shall be
made by the board without a prior public hearing upon at least 10 days’
notice. Such public hearings shall be held at such times and places as
may be designated by the board. However, in respect to matters of local
interest such hearings shall be held at the county seat of the county
wherein the greater part of real or personal property affected is
situated. Any interested person shall be entitled to be heard at such
hearings.

(3) When an emergency requiring immediate action is found to exist,
the board may in compliance with ORS chapter 183 issue an emergency order
without notice or hearing, effective upon promulgation. However, no
emergency order shall remain effective for more than 15 days.

(4) Notice as required by this chapter shall be given in compliance
with ORS chapter 183, except as follows:

(a) In respect to matters of statewide interest, by publication in
a newspaper of general circulation in Multnomah, Harney, Jackson and
Marion Counties.

(b) In respect to matters of local interest, by publication in a
newspaper of general circulation in the county or counties wherein the
affected lands are located.

(c) In respect to proceedings before the board where persons are
named therein, by personal service upon such persons thereto. Personal
service may be made by any agent of the board or by any officer
authorized by law to serve process and shall be made in the manner
provided by law for the service of summons in civil actions in the courts
of this state. Proof of service by an agent of the board shall be made by
such person’s affidavit and by an officer authorized by law to serve
process by the lawful certificate of the officer.

(5) Notice shall issue in the name of the state and shall be signed
by the chairperson or secretary of the board. It shall specify the style
and number of the proceeding, the time and place of hearing and the
purpose of the proceeding. [1953 c.667 §11; 1961 c.671 §19]The governing board of the State Department of
Geology and Mineral Industries may act upon its own motion or upon the
verified written petition of any interested person. Upon the filing with
the board of such a petition, which shall state in substance the matter
involved, the reasons for and the nature of the relief requested,
concerning any matter within its jurisdiction, the board shall promptly
fix a date for a hearing thereon, and shall cause due notice thereof to
be given as prescribed by ORS 520.105. Such hearing shall be held without
undue delay and the board shall enter its order within 30 days
thereafter. [1953 c.667 §12](1) The governing board of the State Department
of Geology and Mineral Industries may summon witnesses, administer oaths
and require the production of records, books and documents for
examination at any hearing or investigation conducted before the board.
No person shall be excused from attending and testifying or from
producing books, papers and records before the board or a court or from
obedience to the subpoena of the board or a court on the grounds that
such testimony or evidence required of the person may tend to incriminate
the person or subject the person to any penalty or forfeiture. Nothing in
this section, however, shall be construed as requiring any person to
produce any books, papers or records or to testify in response to any
inquiry not pertinent to some question lawfully before such board or
court for determination. No natural person shall be subjected to criminal
prosecution or to any penalty or forfeiture for or on account of any
transaction, matter or thing concerning which, in spite of the objection
of the person, the person may be required to testify or produce evidence
before the board or a court. However, no person so testifying shall be
exempted from prosecution and punishment for perjury in so testifying.

(2) In case of failure or refusal on the part of any person to
comply with the subpoena issued by the board or in the case of the
refusal of any witness to testify as to any matter regarding which the
witness may lawfully be interrogated it shall be the duty of the circuit
court of any county or any judge thereof, upon application of the board,
to issue an order to show cause why such person should not be held for
contempt as in the case of disobedience of the requirements of a subpoena
issued from such court or a refusal to testify therein.

(3) The board or any party may, in any matter before the board,
cause the depositions of witnesses residing within or without the state
to be taken in the manner prescribed by law for like depositions in civil
suits in the circuit courts of this state. [1953 c.667 §13; 2005 c.22
§374]Any person adversely affected by any rule, regulation or
order of the governing board of the State Department of Geology and
Mineral Industries may within 30 days after its entry apply to the board
for a rehearing. Such application shall be acted upon by the board within
30 days from its filing date and if granted such rehearing shall be held
without undue delay. [1953 c.667 §14] Any person adversely
affected by any rule, regulation or an order entered by the governing
board of the State Department of Geology and Mineral Industries may
obtain judicial review thereof pursuant to ORS chapter 183. [1953 c.667
§15; 1961 c.671 §20; 1979 c.562 §15; 1981 c.146 §3]No person shall, for
the purpose of evading the provisions of this chapter or any rule,
regulation or order of the governing board of the State Department of
Geology and Mineral Industries, make or cause to be made any false entry
or statement in a report required by this chapter or by any rule,
regulation or order of the board or make or cause to be made any false
entry in any record, account or other writing required by this chapter or
by any rule, regulation or order of the board or omit or cause to be
omitted from any such record, account or writing, full, true and correct
entries as required by this chapter or any rule, regulation or order of
the board or remove from this state, or destroy, mutilate, alter or
falsify any such record, account or writing. [1953 c.667 §16] No
person shall knowingly aid or abet any other person in the violation of
any provision of this chapter or of any rule, regulation or order of the
governing board of the State Department of Geology and Mineral
Industries. [1953 c.667 §17](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 governing board of the State Department of
Geology and Mineral Industries, the board shall bring an action against
such person in the circuit court of any county where the violation occurs
or is threatened, to restrain such person from continuing such violation.
In any such action, the court shall have jurisdiction to grant to the
board, without bond or other undertaking, such temporary restraining
orders or final prohibitory and mandatory injunctions as the facts may
warrant, including any such orders restraining the movement or
disposition of oil or gas.

(2) If the board fails to bring an action to enjoin a violation or
threatened violation of any provision of this chapter or of any rule,
regulation or order of the board, within 15 days after receipt of a
written request to do so by any person who is or will be adversely
affected by such violation, then the person making such request may bring
an action to restrain such violation or threatened violation in any court
in which the board might have brought such action. The board shall be
made a party defendant in such action in addition to the person or
persons bringing the action and the action shall proceed and injunctive
relief may be granted without bond in the same manner as if the action
had been brought by the board. [1953 c.667 §18; 1979 c.284 §162]SPACING UNITS(1) When necessary to prevent waste, avoid the drilling of
unnecessary wells or protect correlative rights the governing board of
the State Department of Geology and Mineral Industries 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 above purposes the board 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 shall be such as will
result in efficient and economical development of the pool as a whole and
the size thereof shall not be smaller than the maximum area that can be
efficiently drained by one well.

(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. If an owner
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, then the owner may apply to
the State Geologist for permission to drill a well at a location other
than that prescribed by such spacing order. The State Geologist shall
notify adjacent mineral owners of such application and any such owner may
request a hearing by the board to consider the application. If no request
for a hearing is made in writing within 20 days the State Geologist may
issue an order approving the drilling site. Any order by the board or
State Geologist under this section 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 board 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 protect correlative rights an order establishing spacing
units in a pool may be modified by the board to increase the size of
spacing units in a pool or any zone thereof or to permit the drilling of
additional wells on a reasonably uniform plan in such pool or zone.
[Formerly 520.065; 1981 c.146 §4] (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
such spacing unit, then the interested persons may integrate their tracts
or interests for the development and operation of the spacing unit.

(2) In the absence of voluntary integration, the governing board of
the State Department of Geology and Mineral Industries, upon the
application of any interested person, shall make an order integrating all
tracts or interests in the spacing unit for the development and operation
thereof and for the sharing of production therefrom. The board, as a part
of the order establishing one or more spacing units, may prescribe the
terms and conditions upon which the royalty interests in the units shall,
in the absence of voluntary agreement, be deemed to be integrated without
the necessity of a subsequent order integrating royalty interests. Each
such integration order shall be upon terms and conditions that are just
and reasonable. [Formerly 520.075](1) An
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 water
floods, is authorized and may be performed and shall not be held or
construed to violate ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and
59.995 or any of the statutes of this state relative to trusts,
monopolies or contracts and combinations in restraint of trade, if such
agreement is approved by the governing board of the State Department of
Geology and Mineral Industries as being in the public interest, for the
protection of correlative rights and reasonably necessary to increase
ultimate recovery or prevent waste of oil or gas. The failure to submit
such an agreement to the board for approval does not, for that reason,
imply or constitute evidence that the agreement or operations conducted
pursuant thereto violate ORS 59.005 to 59.451, 59.660 to 59.830, 59.991
and 59.995 or any statute of this state now or hereafter in effect
relating to trusts and monopolies.

(2) An agreement for the unit or cooperative development or
operation of a field, pool or part thereof may be submitted to the board
for approval as being in the public interest or reasonably necessary to
prevent waste or protect correlative rights. Approval by the board
constitutes a complete defense to any proceeding charging violation of
ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995 or of any
statute of this state now or hereafter in effect relating to trusts and
monopolies on account thereof or on account of operations conducted
pursuant thereto. The failure to submit such an agreement to the board
for approval does not, for that reason, imply or constitute evidence that
the agreement or operations conducted pursuant thereto violate ORS 59.005
to 59.451, 59.660 to 59.830, 59.991 and 59.995 or any statute of this
state now or hereafter in effect relating to trusts and monopolies.
[Formerly 520.085; subsection (2) enacted as 1961 c.671 §13; 1963 c.69 §1](1) For the
purpose of properly conserving the natural resources of any single oil or
gas pool or field, lessees under ORS 274.705 to 274.860 and their
representatives may unite with each other jointly or separately, or
jointly or separately with others owning or operating lands not belonging
to the state, in collectively adopting and operating under a cooperative
or unit plan of development or operation of the pool or field, whenever
it is determined by the Department of State Lands to be necessary or
advisable in the public interest.

(2) The Department of State Lands may, with the consent of the
holders of the leases involved, establish, alter, change and revoke any
drilling and production requirements of such leases, and make such
regulations with reference to such leases, with like consent on the part
of the lessees, in connection with the institution and operation of any
such cooperative or unit plan, as the Department of State Lands deems
necessary or proper to secure the proper protection of the interests of
the state. [1961 c.619 §33](1) The board as defined in ORS 520.005, upon
its own motion may, and upon the application of any interested person
shall, hold a hearing to consider the need for the operation as a unit of
one or more pools or parts thereof in a field.

(2) The board shall make an order providing for the unit operation
of a pool or part thereof if it finds that:

(a) Unit operation is reasonably necessary to effectively carry on
pressure control, pressure maintenance or repressuring operations,
cycling operations, water flooding operations, injection operations, or
any combination thereof, or any other method of recovery designed to
substantially increase the ultimate recovery of oil from the pool or
pools; and

(b) The value of the estimated additional recovery of oil or gas
exceeds the estimated additional cost incident to conducting unit
operations. [1961 c.671 §2]UNIT OPERATIONS An order issued pursuant to ORS
520.260 shall be upon terms and conditions that are just and reasonable,
and shall prescribe a plan for unit operations that includes the
following:

(1) A description of the pool or pools or parts thereof to be so
operated.

(2) A statement of the nature of the operations contemplated.

(3) An allocation to the separately owned tracts in the unit area
of all the oil and gas that is produced from the unit area and is saved,
being the production that is not used in the conduct of operations on the
unit area or not unavoidably lost.

(4) A provision for the credits and charges to be made in the
adjustment among the owners in the unit area for their respective
investments in wells, tanks, pumps, machinery, materials and equipment
contributed to the unit operations.

(5) A provision stating how the costs of unit operations, including
capital investments, shall be determined and charged to the separately
owned tracts and how these costs shall be paid, including a provision
stating when, how and by whom the unit production allocated to an owner
who does not pay the share of the cost of unit operations charged to such
owner, or the interest of such owner, may be sold and the proceeds
applied to the payment of such costs.

(6) A provision, if necessary, for carrying or otherwise financing
any person who elects to be carried or otherwise financed, allowing a
reasonable interest charge for such service payable out of that person’s
share of the production.

(7) A provision for the supervision and conduct of the unit
operations, in respect to which each person shall have a vote with a
value corresponding to the percentage of the costs of unit operations
chargeable against the interest of that person.

(8) The time when the unit operations shall commence, and the
manner in which, and the circumstances under which, the unit operations
shall terminate.

(9) Additional provisions that are found appropriate for carrying
on the unit operations, and for the protection of correlative rights.
[1961 c.671 §3] (1) The
allocation described in ORS 520.270 (3) shall be in accord with the
agreement, if any, of the interested parties. If there is no such
agreement, the governing board of the State Department of Geology and
Mineral Industries shall determine the relative value, from evidence
introduced at the hearing, of the separately owned tracts in the unit
area, exclusive of physical equipment, for development of oil and gas by
unit operations. The production allocated to each tract shall be the
proportion that the relative value of each tract so determined bears to
the relative value of all tracts in the unit area.

(2) That portion of the unit production allocated to any tract, and
the proceeds from the sale thereof, are the property and income of the
several persons to whom, or to whose credit, they are allocated or
payable under the order providing for unit operations. [1961 c.671 §§4,10](1) No order of the governing board of the State Department of
Geology and Mineral Industries providing for unit operations is effective
until:

(a) The plan for unit operations prescribed by the board under ORS
520.270 has been approved in writing by (A) those owners who, under the
board’s order, will be required to pay at least 75 percent of the costs
of the unit operation, and (B) those persons who, at the time of the
order of the board, owned of record legal title to 75 percent of royalty
and overriding royalty payable with respect to oil and gas produced from
the pool or part thereof over the entire unit area; and

(b) The board has made a finding, either in the order providing for
unit operations or in a supplemental order, that the plan for unit
operations has been so approved.

(2) If the plan for unit operations has not been approved pursuant
to subsection (1) of this section at the time the order providing for
unit operations is made, the board shall upon application and notice hold
such supplemental hearings as are required to determine if and when the
plan for unit operations has been approved. If the persons owning the
percentage of interest in the unit area required by subsection (1) of
this section do not approve the plan for unit operations within a period
of six months after the date on which the order providing for unit
operations is made, the order is ineffective and shall be revoked by the
board unless the board, for good cause shown, extends the time for
approval. [1961 c.671 §5] An order providing for unit
operations may be amended by an order made by the board, as defined in
ORS 520.005, in the same manner and subject to the same conditions as an
original order providing for unit operations. However:

(1) If the amendment affects only the rights and interests of the
owners, the approval of the amendment by the royalty owners is not
required.

(2) The order of amendment may not change the percentage for the
allocation of:

(a) Oil and gas as established for any separately owned tract by
the original order, except with the consent of all persons owning oil and
gas rights in the tract; or

(b) Cost as established for any separately owned tract by the
original order, except with the consent of all owners in the tract. [1961
c.671 §6](1) The board, as defined in ORS 520.005, by
order may provide for the unit operation of a pool or pools or parts
thereof that embrace a unit area established by a previous order of the
board. The order, in providing for the allocation of unit production,
shall first treat as a single tract the unit area previously established,
and the portion of the unit production so allocated thereto shall then be
allocated among the separately owned tracts included in the previously
established unit area in the same proportions as those specified in the
previous order.

(2) An order may provide for unit operations on less than the whole
of a pool where the unit area is of such size and shape as may reasonably
be required for that purpose, and the conduct thereof will have no
adverse effect upon other portions of the pool. [1961 c.671 §§7,8](1) No division order or other contract relating to the sale
or purchase of production from a separately owned tract may be terminated
by the order providing for unit operations, but remains in force and
applies to oil and gas allocated to that tract until terminated in
accordance with the provisions thereof.

(2) Except to the extent that the parties affected so agree, no
order providing for unit operations results in a transfer of all or any
part of the title of any person to the oil and gas rights in any tract in
the unit area.

(3) All property, whether real or personal, that may be acquired in
the conduct of unit operations under ORS 520.260 to 520.330 and 520.230
(2) shall be acquired for the account of the owners within the unit area,
and is the property of such owners in the proportion that the expenses of
unit operations are charged. [1961 c.671 §§11,12] All operations,
including but not limited to the commencement, drilling or operation of a
well, upon any portion of the unit area, are considered for all purposes
the conduct of such operations upon each separately owned tract in the
unit area by the several owners thereof. The portion of the unit
production allocated to a separately owned tract in a unit area, when
produced, is considered for all purposes to have been actually produced
from that tract by a well drilled thereon. Operations conducted pursuant
to an order of the board, as defined in ORS 520.005, providing for unit
operations constitute a fulfillment of all the express or implied
obligations of each lease or contract covering lands in the unit area to
the extent that compliance with such obligations cannot be had because of
the order of the board. [1961 c.671 §9]UNDERGROUND RESERVOIRS The underground storage of natural
gas in Oregon is found by the Legislative Assembly to be in the public
interest in that the establishment of underground reservoirs of natural
gas will help insure the continued, uninterrupted availability of natural
gas supplies to residential, commercial and industrial consumers in
Oregon during periods of peak demand and during interruptions in the
normal flow of natural gas supplies. [1977 c.296 §5](1) All natural gas in an underground reservoir utilized for
underground storage, whether acquired by eminent domain or otherwise,
shall at all times be the property of the natural gas company utilizing
said underground storage, its heirs, successors, or assigns. In no event
shall such gas be subject to the rights of the owner of the surface of
the land under which said underground reservoir lies or of the owner of
any mineral interest therein or of any person other than said natural gas
company, its heirs, successors and assigns to release, produce, take,
reduce to possessions, or otherwise interfere with or exercise any
control thereof.

(2) Any right of condemnation granted for the purposes of ORS
520.340, 772.610 to 772.625 and this section shall be without prejudice
to the rights of the owner of the condemned lands or of the rights and
interest therein to drill or bore through the underground reservoir in
such a manner as shall protect the underground reservoir against
pollution and against the escape of natural gas in a manner which
complies with the orders and rules of the State Department of Geology and
Mineral Industries. Such condemnation shall be without prejudice to the
owners of such lands or other rights or interests therein as to all other
uses thereof. The additional costs of complying with rules or orders to
protect the underground shall be paid by the condemnor. [1977 c.296 §6]PENALTIESSubject to ORS 153.022, violation of any
provision of this chapter or any rule, regulation or order of the
governing board of the State Department of Geology and Mineral Industries
is punishable, upon conviction, by a fine not exceeding $2,500 or
imprisonment in the county jail for a term not exceeding six months, or
both. [1953 c.667 §19; 1999 c.1051 §315]