Payment of proceeds - Times - Information accompanying payment - Violation - Jurisdiction of district court - Court costs and fees.

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A. The proceeds derived from the sale of brine, solution gas or brine and solution gas production shall be paid to persons legally entitled thereto, commencing no later than six (6) months after the date of first sale, and thereafter no later than sixty (60) days after the end of the calendar month within which proceeds are received for subsequent production. In those instances where proceeds are not received for disposition of brine, solution gas or brine and solution gas production due to venting, flaring, use for operations, nonpayment from purchasers, or any other cause, the time periods previously specified within which any required payment shall be paid to the persons legally entitled thereto shall be measured from the date on which such venting, flaring, use for operations, nonpayment or other event occurred. Provided, proceeds from the sale of brine and solution gas from lands covered by a pending application for unitization pursuant to this act shall be paid to persons legally entitled thereto within six (6) months from the entry of a final order of unitization, together with interest thereon at the rate of six percent (6%) per annum to be compounded annually, calculated from the date of first sale after the filing of the application for unitization. Such payment is to be made to persons entitled thereto by the operator of such production. Provided, such operator may remit to the persons entitled to such proceeds from production semiannually for the aggregate of six (6) months' accumulation of monthly proceeds of amounts less than Twenty-five Dollars ($25.00). Further provided, that any delay in determining the persons legally entitled to an interest in such proceeds from production caused by unmarketable title to such interest shall not affect payments to persons whose title is marketable. Provided, however, that in those instances where such proceeds cannot be paid because the title thereto is not marketable, the operator of such production shall cause all proceeds due such interest to earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the last day of the production month, until such time as the title to such interest has been perfected. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.

B. The following information shall be included with each payment made to a brine owner from the sale of brine:

1. Unit identification;

2. Month and year of sales included in the payment;

3. Total volume of production from the unit of brine, solution gas and concentration of chemical substances contained therein and volumes extracted therefrom;

4. Owner's interest, expressed as a decimal, in production from the unit;

5. Total value of extracted chemical substances and solution gas, including the price per unit of measurement at which the products were sold;

6. Owner's share of the total value of sales prior to any deductions;

7. Owner's share of the total value of sales after any deductions; and

8. A specific detailed listing of the amount and purpose of any deductions, including, but not limited to BTU adjustments and taxes, from the gross proceeds due to the owner.

C. Any operator that violates this section shall be liable to the persons legally entitled to the proceeds from production for the unpaid amount of such proceeds with interest thereon at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the last day of the production month.

D. The district court for the county in which the unit is located shall have jurisdiction over all proceedings brought pursuant to this section. The prevailing party in any proceeding brought pursuant to this section shall be entitled to recover any court costs and reasonable expert witness and attorney's fees.

Added by Laws 1990, c. 255, § 18, eff. Sept. 1, 1990.


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