Section 6830.1 - Secondary operations to obtain maximum economic ultimate recovery of oil and gasIt is hereby found and determined by the Legislature of the State of California as follows:
(a) That the people of the State of California have a direct and primary interest in assuring the production of the optimum quantities of oil and gas from lands owned by the state, and that a minimum of oil and gas be left wasted and unrecovered in such lands.(b) That the state owns tide and submerged lands, which lands have been developed under oil and gas leases issued by the state to such extent that it is desirable that secondary operations be undertaken within such lands in an effort to obtain the maximum economic ultimate recovery of oil and gas from said lands; and that it is desirable that the carrying on of secondary recovery operations in such lands be encouraged, which operations the holders of such leases may otherwise not undertake because certain of the leases covering such lands provide for the payment of graduated royalties dependent upon daily per well rates of oil production (which, in the case of multiple completions, means the separately measured average daily production from each zone produced through a separate string of tubing or through casing which is not in communication with any other zone), which graduated royalties were established without contemplation of secondary recovery operations and the economics respecting such operations. The definition relating to multiple completions set forth herein shall apply to leases executed on or after the effective date of the amendments made to this section at the 1966 Second Extraordinary Session of the Legislature and may, with the approval of the commission, apply to oil produced from leased lands with respect to which the commission and the holder of the lease shall, on or after the effective date of such amendments, enter into an amendatory agreement pursuant to Section 6830.2. It is not the intention of the Legislature in enacting this paragraph to declare the law relating to the computation of daily per well rates of oil production from multiple completions before the effective date of such amendments or in the absence of such an amendatory agreement.
Ca. Pub. Res. Code § 6830.1
Amended by Stats. 1966, 2nd Ex. Sess., Ch. 7.