11 Alaska Admin. Code § 83.351 : Natural Resources — Lands — Oil and Gas Leasing — Unitization — Participating area

(a) At least 90 days before sustained unit production from a reservoir, the unit operator shall submit to the commissioner for approval a description of the proposed participating area, based on subdivisions of the public land or its aliquot parts. The participating area may include only the land reasonably known to be underlain by hydrocarbons and known or reasonably estimated through use of geological, geophysical, or engineering data to be capable of producing or contributing to production of hydrocarbons in paying quantities. If any portion of a lease is included in a participating area formed under a unit agreement, the entire leased land will be committed to the unit and the lease will not be severed. Under 11 AAC 83.371(a), the unit operator also shall submit to the commissioner for approval of a proposed division of interest or formula setting out the percentage of production and costs to be allocated to each lease or portion of lease within the participating area. Upon approval by the commissioner, the area of productivity constitutes a participating area.
(b) A separate participating area must be established as provided in (a) of this section for each reservoir delineated, except that with the consent of the commissioner and all working interest owners, any two or more reservoirs or participating areas within the unit may be combined into one participating area. Separate participating areas may be established to distinguish between an oil rim and a gas cap within the same reservoir.
(c) A participating area must be expanded to include acreage reasonably estimated through use of geological, geophysical, or engineering data to be capable of producing or contributing to the production of hydrocarbons in paying quantities, and must be contracted to exclude acreage reasonably proven through use of geological, geophysical, or engineering data to be incapable of producing hydrocarbons in paying quantities, subject to approval by the commissioner. A revised division of interest or formula allocating production and costs must be submitted for approval under 11 AAC 83.371 at the time of expansion or contraction of a participating area.

11 AAC 83.351

Eff. 6/28/81, Register 78; am 3/18/83, Register 85; am 3/30/84, Register 89; am 7/1/89, Register 110

Authority:AS 38.05.020

AS 38.05.145

AS 38.05.180