Corporation Commission

Article excerpt

(14453)

NOTICE

OF PROPOSED RULEMAKING

Cause No. RM 000074

Before the Corporation Commission of the State of Oklahoma.

In the Matter of adopting rules implementing Senate Bill No. 168 (1992).

Pursuant to 52 O.S. Sections 570.13 and 547, the Oklahoma Corporation Commission hereby commences rulemaking to implement the Production Revenue Standards Act ("PRSA") and the Natural Gas Market Sharing Act ("NGMSA"), both found in 1992 Okla Sess. Chapter 190, commonly known as Senate Bill No. 168 (1992).

The following summarizes the rule proposals. OAC 165:10-23 on revenue sharing would be deleted. Senate Bill No. 168 repealed the statutes on which Subchapter 23 was based. Next, the Commission plans to establish OAC 165:10-26, to implement PRSA. Section 1 of the Subchapter 26 establishes the scope of the Subchapter per the requirements of PRSA Section 3. Section 2 of the subchapter proposes effective dates for the rules. For statutory requirements now in effect, the rules would be effective on the date of emergency or final adoption. The other provisions go into effect on July 1, 1993, under Section 31 of the Act. Section 4 of the subchapter provides for operator solicitation of information about payees in a well. The procedure comes from PRSA Section 8A. The information is necessary to establish accounts for a well's "PRSA royalty pool." Section 5 of the subchapter adopts the statutory scheme of PRSA Section 8B for pre-production nominations by working interest owners who separately market production. Section 6 of the subchapter incorporates the PRSA concept of a proportionate production interest for gas balancing. Section 7 of the subchapter establishes PRSA Section 8 requirements for postsale reports. Section 8 of the subchapter contains PRSA Section 8 supplemental remedies against persons who fail to provide payee information, a pre-production nomination or a post-sale report. Section 9 of the subchapter implements PRSA Sections 4 and 5 concerning designated payors for royalty payments. Section 10 of the subchapter incorporates PRSA Section 6 requirements for treating in-kind royalty distributions in the royalty pool accounting. Section 11 of the subchapter concerns administrative fees to be developed after completion an operator survey. Section 12 of the subchapter adopts the PRSA Section 7 scheme for voluntary balancing of royalty accounts. …