Okla. Stat. tit. 52, § 52-570.8

Nomination of gas for producing owner's account - Producing owner's

report - Gas meter owner's statement - First purchaser's or

shipper's statement - Records to be maintained - Operator's rights

and remedies for noncompliance - Elections and notices - Other

remedies.

A. Within sixty (60) days after receiving a written request

from the operator, each working interest owner in a well producing

gas shall furnish or cause to be furnished to the operator a written

statement showing the name, address, royalty interest, taxpayer

identification number and payment status of owners of royalty

interest to which such working interest is subject. Thereafter,

each working interest owner shall furnish or cause to be furnished

to the operator a written statement showing:

1. Changes in the above specified information within sixty (60)

days of receipt of notification thereof; or

2. Changes in its working interests within sixty (60) days of

the receipt of notice of the change.

B. Each producing owner of gas from a well shall provide to the

operator no later than five (5) business days prior to the month in

which the nomination is to be effective, but earlier if required by

the first purchaser or transporter, the name of the first purchaser

or shipper and the volumes of gas nominated for production for such

producing owner's account. The term "shipper", as used in this

section, shall include any entity who contracts with a transporter

to move gas through the transporter's system. The owner of the gas

meter shall confirm all nominations with the operator of the well no

later than the last business day prior to the month in which

production occurs.

C. Within sixty (60) days after the end of the month of

production, each producing owner shall report and account to the

operator of the well, the identity of the first purchaser or shipper

of the gas and the information specified in Section 570.12 of this

title. Within thirty (30) days after receiving notice of any

Oklahoma Statutes - Title 52. Oil and Gas Page 239

retroactive gas volume adjustment, each producing owner shall

furnish, or cause to be furnished, notice of such retroactive

adjustment to the operator of the well.

D. Within fifteen (15) days after the end of the month of

production, each owner of a gas meter taking gas solely from a

gathering system shall provide upon first request by the owner of

such gathering system and thereafter, the gross volume of gas

measured by such meter both in MCF and British Thermal Unit

equivalent.

Within twenty (20) days after the end of the month of

production, each owner of a gas meter shall provide or cause to be

provided in writing to the operator of the well, the gross volume of

gas measured by such meter, both in MCF and British Thermal Unit

equivalent, and the volume of gas allocated at the meter to each

first purchaser or shipper and each contracted producing owner that

sold gas to the owner of the gas meter. Each meter owner shall,

within the same time period, furnish each first purchaser or shipper

the volume of gas allocated at the meter to that first purchaser or

shipper. However, in the event a gas processing plant operator is

performing the allocations, within ten (10) days after the end of

the production month, the pipeline residue gas meter owner shall

provide, upon first request by the processing plant operator and

thereafter, the volume and British Thermal Unit equivalent measured

through its meter as required by the gas processing plant operator

for its allocations under this subsection.

The owner of a gas meter who has a gas contract, whether one or

more, with one or more producing owners covering all of the gas

flowing through its gas meter, may, as an alternative to supplying

the operator with the information stated in this subsection, furnish

monthly volume statements to the operator of the well, provided it
ssing plant operator

for its allocations under this subsection.

The owner of a gas meter who has a gas contract, whether one or

more, with one or more producing owners covering all of the gas

flowing through its gas meter, may, as an alternative to supplying

the operator with the information stated in this subsection, furnish

monthly volume statements to the operator of the well, provided it

has already furnished the operator with the names of the producing

owners and the decimal interest owned by each such producing owner

or any method other than by decimal interest then in effect for

allocating gas among the producing owners. Thereafter, the owner of

the gas meter shall only be required to supply the operator with

changes to the name of a producing owner, the decimal interest owned

by a producing owner or the method, other than by decimal interest,

for allocating gas among the producing owners within thirty (30)

days after receiving notice of such change.

Within thirty (30) days after receiving notice of any

retroactive gas volume adjustment, each owner of a gas meter shall

furnish notice of such retroactive adjustment to the operator of the

well.

E. Within thirty-five (35) days after the end of the month of

production each first purchaser or shipper of gas from a gas meter

shall furnish or cause to be furnished to the operator of the well,

a volume allocation statement showing the volume of gas purchased

Oklahoma Statutes - Title 52. Oil and Gas Page 240

from or shipped for each contracted producing owner. Within thirty

(30) days after making any retroactive gas volume adjustment for

such well, the first purchaser or shipper shall furnish notice of

such retroactive gas volume adjustment to the operator of the well.

F. Any owner of a gas meter, first purchaser, or any gas

shipper that does not provide the information required under

subsection D or E of this section shall subject the producing owner

or owners contracted to such entity to the same remedies available

to the operator under subsection H of this section, as if such

producing owner or owners are in noncompliance with subsections A

and C of this section.

G. For production occurring after August 31, 1992, each person

distributing proceeds to a royalty interest owner shall maintain for

a period of not less than five (5) years:

1. Copies of information furnished to the operator pursuant to

the Production Revenue Standards Act; and

2. A record of receipts and payments of proceeds which have

occurred pursuant to the Production Revenue Standards Act.

Such records shall be available for inspection upon reasonable

notice by any affected royalty interest owner in the well.

H. The Production Revenue Standards Act shall not supersede or

limit the operator's right to control gas nominations and

allocations pursuant to the provisions of any joint operating

agreement, gas balancing agreement or other agreement then in effect

between the operator of the well and any producing owner, or any

order of the Oklahoma Corporation Commission. If the operator of

the well is not provided with the information set forth in

subsections A and C of this section within the sixty-day period set

forth in each said subsection, the operator of the well shall have

the right, but not the obligation, to confirm zero volume of gas

sales for such noncomplying producing owner and to make available

for nomination and sale to the producing owners in the well then in

compliance with the provisions of subsections A and C of this

section, all of the noncomplying producing owner's share of

production for the next subsequent calendar month of production and

for each and every month thereafter during which such producing

owner is in noncompliance with provisions of subsections A and C of

this section. If the operator elects to make the noncomplying

producing owner's share of production available for nomination and
this

section, all of the noncomplying producing owner's share of

production for the next subsequent calendar month of production and

for each and every month thereafter during which such producing

owner is in noncompliance with provisions of subsections A and C of

this section. If the operator elects to make the noncomplying

producing owner's share of production available for nomination and

sale, the operator shall immediately notify the noncomplying

producing owner, by certified mail, that it shall no longer have the

right to nominate any volume of gas until it is in compliance with

the provisions of subsections A and C of this section, or its first

purchaser, shipper or owner of the gas meter are in compliance with

subsections D and E of this section. Such notice shall contain the

following information:

1. Lease or well identification;

Oklahoma Statutes - Title 52. Oil and Gas Page 241

2. Legal location; and

3. Production months of noncompliance with subsections A, C, D

or E of this section.

The operator shall then immediately notify each producing owner

then in compliance with subsections A and C of this section that

additional gas may be available for nomination and sale. The

operator shall also immediately notify in writing the noncomplying

producing owner's first purchaser or shipper and the owner of the

gas meter that the producing owner, first purchaser, shipper or

owner of the gas meter is in noncompliance with the provisions of

subsections A, C, D or E of this section and thus does not have the

right to nominate and sell or transport any volume of gas until it

is in compliance with this section.

The first purchaser or shipper and the owner of the gas meter

shall be entitled to rely on and shall incorporate on a prospective

basis any nomination or allocation changes pursuant to such

notification from the operator under this section. Changes pursuant

to such notification can be made on a retroactive basis if so agreed

to by the operator, owner of the meter, and first purchaser or

shipper.

As soon as a noncomplying party is in compliance with the

provisions of this section, but no sooner than the next production

month unless otherwise agreed to, the operator of the well shall

give the affected producing owner the opportunity to nominate and

sell gas subject to existing agreements or by common practice within

the oil and gas industry.

Any noncomplying party that disagrees with the information

contained in the operator's written notice required under this

subsection shall have the right to challenge the operator's actions

pursuant to the provisions of subsection J of this section.

I. All elections and notices given pursuant to the provisions

of the Production Revenue Standards Act shall become effective as of

the first day of the month following the end of any time period

specified in the Production Revenue Standards Act.

J. The remedies provided for in this section shall not preclude

any party from pursuing the remedies available to it through the

district courts, as provided by existing law, including the right to

offset.

K. Nothing contained in the Natural Gas Market Sharing Act

shall change the obligations of a purchaser under an existing gas

contract unless otherwise agreed to by the parties.