Okla. Admin. Code § 165:5-7-11

Current through Vol. 41, No. 19, June 17, 2024

Section 165:5-7-11 - Change of operator

(a)Scope. This Section addresses designation of operators under forced pooling orders, location exception orders, and increased density orders.

(b)Designation of operator under a forced pooling order. Each order forced pooling the rights and equities in a drilling and spacing unit shall designate at least one operator to operate the well or unit. In addition, the Commission may designate one or more alternate operators in the order.

(c)Procedure for obtaining a change of operator under a forced pooling order. Application, notice and hearing shall be prerequisites to the issuance of an order changing or deleting a designation of operator in any forced pooling order. The applicant shall send or cause to be sent copies of the application and notice of hearing by certified mail at least fifteen (15) days prior to the hearing to the respondents to the pooling order or to their successors in interest and the notice of hearing shall be published as required in OAC 165:5-7-1(n)(2). Provided, however, this procedure shall not be the exclusive method of obtaining a change of operator under a forced pooling order as the use of the forms set forth in OAC 165:5-7-11(g) below is still available. If such forms are used, Applicant must still provide personal notice by sending or causing to be sent copies of the application and notice of hearing by certified mail to the respondents to the pooling order or their successors in interest as well as publishing the notice of hearing as required in OAC 165:5-7-1(n)(2).

(d)Optional designation of operator for location exception and increased density orders. A designation of operator shall not be necessary for an order for either a well location exception or increased well density. In any situation where a location exception or increased density order designates an operator, the Commission may issue an order either appointing a successor operator or removing the designation of operator provision.

(e)Procedure for obtaining a change in operator designation regarding increased density and location exception orders. Application, notice and hearing shall be prerequisites to issuance of an order changing or deleting a designation of operator in increased density and location exception orders. The applicant shall mail or cause to be mailed copies of the application and notice of hearing to each current working interest owner in the well at least fifteen (15) days prior to the hearing and the notice of hearing shall be published as required in OAC 165:5-7-1(n)(2). Provided, however, this procedure shall not be the exclusive method of obtaining a change of operator under increased density and location exception orders as the use of the forms set forth in OAC 165:5-7-11(g) below is still available. If such forms are used, Applicant must still mail or cause to be mailed copies of the application and notice of hearing to each current working interest owner in the well at least fifteen (15) days prior to the hearing and the notice of hearing shall be published as required in OAC 165:5-7-1(n)(2). No application, notice, or hearing shall be required to change or delete the designation of operator in increased density or location exception orders when:

(1) The interest of the currently designated operator is transferred to its subsidiary or parent company, or a subsidiary of a parent company;

(2) The interest of the currently designated operator is transferred to a surviving or resulting corporation or business entity due to, respectively, a merger, consolidation or reorganization involving the transferor and transferee. As used in this paragraph, "business entity" means a domestic or foreign partnership, whether general or limited; limited liability company; business trust; common law trust, or other unincorporated business; or

(3) The currently designated operator undergoes a name change. The relief afforded by this paragraph is not applicable to situations where the name change involves the following conditions:

(A) The assignment of a new Federal Employer Identification number by the Internal Revenue Service to the new company;

(B) The name change is accompanied by a change in the majority of partners in a partnership;

(C) The name change is associated with a divorce between a husband and wife when the husband and wife comprise a partnership;

(D) The name change is associated with the death of one spouse in a partnership comprised of a husband and wife;

(E) The name change involves a sole proprietorship; or

(F) The name change is associated with such other circumstances where the Commission determines upon application, notice and hearing that the relief provided in this paragraph is not applicable, or that an exception to any exclusion should be granted.

(G) As used in this subsection, the term "partnership" means a domestic or foreign partnership, whether general or limited.

(4) In such events, the parent, subsidiary, surviving or resulting corporation or business entity or currently designated operator who has undergone a name change shall be substituted as designated operator upon filing and approval of Form 1073, required by OAC 165:10-1-15.

(f)Amendment of multiple orders. The applicant may use one application to amend two or more orders, even though the orders grant different types of relief. For purposes of this Chapter, such an application shall be considered as an application for a single form of relief.

(g)Use of Forms 1073A through 1073C.

(1) An applicant shall have the option to use Commission Form 1073A for the application, Form 1073B for the notice of hearing, and Form 1073C for an order changing or deleting a designation of operator.

(2) The Form 1073A shall include the following information:

(A) The order number and type of order.

(B) The name and legal description of the applicable well or drilling and spacing unit.

(C) The OTC operator numbers of the current operator and the proposed operator.

(D) The OTC lease number and API number.

(E) The classification of the well.

(3) If the space provided on the form is insufficient to include the necessary information related to amendment of multiple orders, then the applicant shall attach to the form an exhibit with the necessary information.

(h)Special notice provisions applicable to notices of hearing. For purposes of this Section, the notice of hearing shall contain a special provision apprising the respondent of the requirements for protests under (i) of this Section.

(i)Requirements for protests. Any person desiring to protest an application shall file a written protest to the application during the protest period, which shall run for fifteen (15) days from the date on which the last publication of the notice of hearing is made. Failure to file a written protest within the fifteen (15) day period shall be deemed consent to the granting of the application. If the application is protested within the fifteen (15) days allowed, a hearing shall be required. If no protest is filed, or if all protests are withdrawn, and the Commission does not require a hearing, the application may be presented to the Manager of the Technical Services Department for administrative review. Applicants submitting applications for administrative review must provide a proposed order on Form 1073C to the Manager of the Technical Services Department. The proposed order shall be reviewed by the Manager of the Technical Services Department prior to submission of the proposed order to the Commission. The proposed order shall properly address service.

(j)Summary disposition of unprotested applications. Applications not contested may be submitted for administrative review by announcement, without necessity of counsel appearing.

(k)Compliance with Form 1073 requirement. The applicant is required to file a Form 1073 transfer of operator with the Oil and Gas Conservation Division pursuant to OAC 165:10-1-15.

Okla. Admin. Code § 165:5-7-11

Amended at Ok Reg 2323, eff 6-25-92; Amended at 10 Ok Reg 2591, eff 6-25-93; Amended at 17 Ok Reg 799, eff 12-28-99 (emergency); Amended at 17 Ok Reg 1853, eff 7-1-00; Amended at 21 Ok Reg 2015, eff 7-1-04

Amended by Oklahoma Register, Volume 35, Issue 24, September 4, 2018, eff. 10/1/2018

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 10/1/2022