Okla. Stat. tit. 52, § 52-287.4

The order of the Commission shall define the area of the common

source of supply or portion thereof to be included within the unit

area and prescribe with reasonable detail the plan of unitization

applicable thereto.

Each unit and unit area shall be limited to all or a portion of

a single common source of supply. Only so much of a common source

of supply as has been defined and determined to be productive of oil

and gas by actual drilling operations may be so included within the

unit area.

A unit may be created to embrace less than the whole of a common

source of supply only where it is shown by the evidence that the

area to be so included within the unit area is of such size and

shape as may be reasonably required for the successful and efficient

conduct of the unitized method or methods of operation for which the

unit is created, and that the conduct thereof will have no material

adverse effect upon the remainder of such common source of supply.

The plan of unitization for each such unit and unit area shall

be one suited to the needs and requirements of the particular unit

dependent upon the facts and conditions found to exist with respect

thereto. In addition to such other terms, provisions, conditions

and requirements found by the Commission to be reasonably necessary

or proper to effectuate or accomplish the purpose of this act, and

subject to the further requirements hereof, each such plan of

unitization shall contain fair, reasonable and equitable provisions

for:

(a) The efficient unitized management or control of the further

development and operation of the unit area for the recovery of oil

and gas from the common source of supply affected. Under such a

plan the actual operations within the unit area may be carried on in

whole or in part by the unit itself, or by one or more of the

lessees within the unit area as unit operator subject to the

supervision and direction of the unit, dependent upon what is most

beneficial or expedient. The designation of the unit operator shall

be by vote of the lessees in the unit in a manner provided in the

plan of unitization and not by the Commission.

(b) The division of interest or formula for the apportionment

and allocation of the unit production, among and to the several

separately owned tracts within the unit area such as will reasonably

permit persons otherwise entitled to share in or benefit by the

production from such separately owned tracts to produce or receive,

in lieu thereof, their fair, equitable and reasonable share of the

unit production or other benefits thereof. A separately owned

tract's fair, equitable and reasonable share of the unit production

shall be measured by the value of each such tract for oil and gas

purposes and its contributing value to the unit in relation to like

values of other tracts in the unit, taking into account acreage, the

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quantity of oil and gas recoverable therefrom, location on

structure, its probable productivity of oil and gas in the absence

of unit operations, the burden of operation to which the tract will

or is likely to be subjected, or so many of said factors, or such

other pertinent engineering, geological, or operating factors, as

may be reasonably susceptible of determination. Unit production as

that term is used in this act shall mean and include all oil and gas

produced from a unit area from and after the effective date of the

order of the Commission creating the unit regardless of the well or

tract within the unit area from which the same is produced.
ther pertinent engineering, geological, or operating factors, as

may be reasonably susceptible of determination. Unit production as

that term is used in this act shall mean and include all oil and gas

produced from a unit area from and after the effective date of the

order of the Commission creating the unit regardless of the well or

tract within the unit area from which the same is produced.

(c) The manner in which the unit and the further development and

operation of the unit area shall or may be financed and the basis,

terms and conditions on which the cost and expense thereof shall be

apportioned among and assessed against the tracts and interests made

chargeable therewith, including a detailed accounting procedure

governing all charges and credits incident to such operations.

Reasonable provision shall be made in the plan of unitization for

carrying or otherwise financing lessees who are unable to promptly

meet their financial obligations in connection with the unit by

establishing a fair rate of interest to all concerned based upon the

terms and conditions as to time and by establishing a penalty

provision which shall be defined as the total expenses minus any

cash contributions received as follows:

1. One hundred percent (100%) of that portion of the cost of

aboveground surface equipment beyond the wellhead connections,

including but not limited to stock tanks, separators, treaters,

pumping equipment and piping, plus one hundred percent (100%) of the

share of the cost of operation of the unit which shall be subject to

the established rate of interest;

2. Three hundred percent (300%) of that portion of the costs

and expenses of drilling wells in the unitized area, including but

not limited to staking, well site preparation, rigging up or

drilling and reworking, deeping or plugging back and testing and

completing the wells; and

3. Three hundred percent (300%) of that portion of the costs

and expenses of the underground pipeline systems, expenses for

injected substances and any other incurred expenses which are not

recoupable in the further development and operation of the unit

area.

(d) The procedure and basis upon which wells, equipment and

other properties of the several lessees within the unit area are to

be taken over and used for unit operations, including the method of

arriving at the compensation therefor, or of otherwise

proportionately equalizing or adjusting the investment of the

several lessees in the project as of the effective date of unit

operation.

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(e) The creation of an operating committee to have general

overall management and control of the unit and the conduct of its

business and affairs and the operations carried on by it, together

with the creation or designation of such other subcommittees, boards

or officers to function under authority of the operating committee

as may be necessary, proper or convenient in the efficient

management of the unit, defining the powers and duties of all such

committees, boards or officers and prescribing their tenure and time

and method for their selection.

(f) The time when the plan of unitization shall become and be

effective.

(g) The time when and conditions under which and the method by

which the unit shall or may be dissolved and its affairs wound up.