Texas Administrative Code
Title 31 - NATURAL RESOURCES AND CONSERVATION
Part 1 - GENERAL LAND OFFICE
Chapter 10 - EXPLORATION AND DEVELOPMENT OF STATE MINERALS OTHER THAN OIL AND GAS
Section 10.6 - Sulphur Unit Agreements
Universal Citation: 31 TX Admin Code ยง 10.6
Current through Reg. 49, No. 38; September 20, 2024
(a) Application for sulphur production agreement. A proposed sulphur unit agreement shall set out:
(1) the total acreage in the unit, the number
of state acres in the unit, and number of privately owned acres in the
unit;
(2) a listing of the leases
included within the proposed unit and recording information for such leases in
the public records;
(3) a plat
outlining the entire unit and showing in red the state acreage included in the
unit;
(4) how production is to be
allocated to each lease; and
(5)
for each state lease, the state's royalty interest and any costs or deductions
allowed against that interest.
(b) Approval of unit agreement.
(1) Any sulphur unit agreement which proposes
to commit royalty interests in PSF lands or state agency lands shall be
submitted to the SLB pooling committee for examination, investigation, and
presentation to the SLB or the appropriate board for lease.
(2) Upon determination by the SLB that the
unit agreement applied for is in the best interests of the state, the
unitization will be approved.
(3)
Any unit agreement which covers lands leased for sulphur under §
10.5
of this title (relating to Mining Leases on Relinquishment Act Lands) shall be
executed by the surface owner before consideration by the SLB. Any such unit
agreement must be approved by the SLB under this section before it is
effective.
(4) Any sulphur unit
agreement which proposes to commit royalty interests in state lands or areas
other than PSF lands must be approved by the appropriate board for lease and
must be found to be in the best interests of the state.
(c) Provisions of unit agreement. A sulphur unit agreement may contain the following provisions:
(1) that operations incident to the drilling
of a well upon any portion of the unit shall be deemed for all purposes to be
the conduct of such operations upon each tract in the unit;
(2) that the production allocated by the
agreement to each tract included in a unit shall, when produced, be deemed for
all purposes to have been produced from such tract;
(3) that the state's royalty interest shall
be paid only on that portion of the production from the unit which is allocated
to the tract in accordance with the agreement;
(4) that each lease included in the unit
shall remain in effect so long as the agreement remains in effect, and that
upon termination of the agreement each lease shall thereafter continue in
effect under its own terms and provisions;
(5) such other terms, conditions, and
provisions as may be deemed to be in the best interest of the state.
(d) Rule of construction. No term, condition, or provision of an approved unit agreement shall be read to burden an interest of the state with any cost, liability, or be read to otherwise adversely impact upon the state's interest unless such burden or adverse impact was expressly raised before and approved by the SLB or appropriate board for lease.
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