§3137.64. As a unit operator, what must I do to prevent or compensate for drainage?
43 C.F.R. § 3137.64
You must prevent uncompensated drainage of oil and gas from unit land by wells on land not subject to the unit agreement. Permissible means of satisfying the obligation include—
Drilling a protective well if it is economically feasible. For this subpart, economically feasible means producing a sufficient quantity of oil or gas from a protective well in the unit for a reasonable profit above the cost of drilling, completing and operating the protective well;
Paying compensatory royalty;
Forming other agreements, or modifying existing agreements, that allow the tracts committed to the unit agreement to share in production after the effective date of the new or modified agreement; or
BLM may require additional measures to prevent uncompensated drainage.
Notes, amendments, and revision history
Source
Source: 67 FR 17886, Apr. 11, 2002, unless otherwise noted.
Authority
Authority: 42 U.S.C. 6508, 43 U.S.C. 1733 and 1740.
Source
Source: 46 FR 55497, Nov. 9, 1981, unless otherwise noted.