§ 22-1. Definitions.

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning. Technical or oil and gas industry words or phrases used herein and not specifically defined herein shall have that meaning customarily attributable thereto by reasonable and prudent operators in the oil and gas industry.

Abandonment shall be as defined by the commission and shall include the restoration of the drill site as required by this chapter.

Approved type and approved design mean and include improvements, equipment or facilities of a type or design approved by the state railroad commission, fire services division or municipal services division.

Blowout preventer means a mechanical, hydraulic, pneumatic or other device or combination of such devices secured to the top of a well casing, including valves, fittings and control mechanism connected therewith, which can be closed around the drill pipe, or other tubular goods which completely close the top of the casing and are designed for preventing blowout.

Cellar means an excavation around and above the top joint of the casing of a well.

Commission means the railroad commission of the state.

Completion of drilling, redrilling and reworking means drilling, redrilling and reworking is completed, for the purpose of this chapter, 30 days after the drilling, redrilling or reworking crew has been released through completion of its work or released by those employing the crew.

Derrick means any portable framework, tower, mast and/or structure which is or are required or used in connection with drilling, reworking, operating, or maintaining a well for the production of oil, gas or other hydrocarbons from the earth.

Desertion means the cessation of operation at a drill site without compliance with the provisions of this chapter relating to suspended operations, idle wells, or abandonment.

Developed area means:

(1)

Any area within 150 feet of an occupied residential, commercial, or office/professional structure which is itself within 100 feet of another occupied residential, commercial, or office/professional structure; or

(2)

Any area within a public park or recreation area which has been developed and opened for public use.

Division order means a contract of sale to the purchaser of oil or gas or oil and gas. Such order directs the purchaser to make payment for the value of the products taken in the proportions set out in the division order.

Drill site means the premises used during the drilling or reworking of a well located thereon.

Drilling means digging or boring a new well for the purpose of exploring for, developing or producing oil, gas or other hydrocarbons, for the purpose of injecting gas, water or any other fluid or substance into the earth.

Drilling equipment means the derrick, together with all parts of and appurtenances to such structure, every piece of apparatus, machinery or equipment, used or erected, or maintained for use in connection with drilling.

Dwelling means a house, duplex, apartment, townhouse, condominium, mobile home or any other building used for residential purposes.

Eligible oil and gas rights means those oil and gas rights which are within the unitized formation and which are qualified to be included in a unit for secondary or enhanced recovery purposes pursuant to a unit agreement.

Fire services division means the volunteer fire department of the city.

Fluids means any gas or liquid.

Gas means any fluid, either combustible or noncombustible, which is produced in a natural state from the earth and which maintains a gaseous or rarefied state at standard temperature and pressure conditions. The term "gas" also means the gaseous components or vapors occurring in or derived from petroleum or natural gas.

Gas well means any well drilled, to be drilled, or used for the intended or actual production of natural gas.

Initial base allowable means the daily allowable or rate of production of oil and gas or oil or gas that the commission has assigned to a particular or individual producing well in the unitized formation for that particular producing well tract. Such initial base allowable shall include any applicable gas-oil ratio penalties or producing capability limitations, but shall exclude any bonus, injection credit or transferred allowable that may result from the conduct of unit operations by a unit operator. Each producing well's initial base allowable shall be determined and used for purposes of calculations pursuant to section 22-8 as of the effective date of a unit agreement and, if applicable, the unit operating agreement corresponding thereto.

Lessee means a person who has a working interest.

Lessor means the owner of surface or mineral rights who has executed a lease.

Maintenance means and includes the repair or replacement of machinery, equipment, apparatus, structure, facility and parts thereof used in connection with an oil operation site or drill site, as well as any other work necessary to reduce fire hazards or any hazards to employees, public health, safety and welfare.

Marketable title means a title free from reasonable doubt in law and in fact, not merely a title valid in fact, but one which readily can be sold or mortgaged to a reasonably prudent purchaser or mortgagee, informed as to the facts and their legal meaning; title under which a purchaser may have quiet and peaceful enjoyment of the property.

Municipal development division means the office of the city manager.

New well means a new well bore or new hole established at the ground surface and shall not include redrilling, reworking of an existing well which is not abandoned.

Nonconsenting owner means a royalty owner, working interest owner, or both royalty owner and working interest owner, of eligible oil and gas rights who participates in production from the unitized formation on the day before the effective date of a unit agreement and who, pursuant to section 22-8, has elected not to be bound by a unit agreement and, if applicable, unit operating agreement.

Nonparticipating owner means a royalty owner, working interest owner, or both royalty owner and working interest owner, of eligible oil and gas rights who does not participate in production from the unitized formation on the day before the effective date of a unit agreement and who, pursuant to section 22-8, has elected not to be bound by a unit agreement and, if applicable, unit operating agreement.

Oil means any liquid hydrocarbons regardless of gravity, capable of being produced from any well in liquid form at the well by ordinary production methods and which is not the result of condensation of gas after it leaves the reservoir.

Oil and gas rights mean the rights to explore, develop, and operate lands within the city or a unit area for the production of oil and/or unitized substances, or to share in the production so obtained or the proceeds thereof.

Oil operation means the construction, use or maintenance of any installation, facility or structure used, either directly or indirectly, to carry out or facilitate one or more of the following functions: exploring, drilling, redrilling, development, reworking and repair, production, processing, extraction, enhanced recovery, stimulation, abandonment, storage or shipping of oil or gas from the subsurface of the earth.

Oil operation site means the physical location where oil operations are conducted.

Oil well means any well drilled, to be drilled, or used for the intended or actual production of liquid petroleum or petroleum products or for the intended or actual disposal of waste liquids including solutions and liquids containing solids in suspension, produced from any such well.

Operator means any person drilling, maintaining, operating, pumping or controlling any well, including, without limitation, a unit operator. However, if the operator, as herein defined, is different from the lessee under an oil or gas lease of any premises affected by the provisions of this chapter, then such lessee shall also be deemed to be an operator. In the event that there is no oil or gas lease relating to any premises affected by this chapter, the owner of the oil and gas rights shall also be deemed an operator.

Outer boundary line means the exterior limits of the land included in the lease or unit, where several contiguous parcels of land in one or different ownerships are operated as a single oil or gas lease or operating unit. In determining the contiguity of any such parcel of land, no street, road or alley lying within the lease or unit shall be deemed to interrupt such contiguity.

Owner means a person who owns the legal or equitable title in and to the surfaces of the drill site or oil operation site.

Permit means a drilling permit issued or sought to be issued under this chapter, authorizing the drilling of an oil well or gas well or other oil operations as herein defined.

Permittee means the person to whom is issued a permit authorizing the oil operations which are the subject matter of this chapter, and his administrators, executors, heirs, successors, and assigns.

Processing means the use of oil operations for gauging, recycling, compressor repressuring, injection, reinjection, dehydration, stimulation, separation (including but not limited to separation of liquids from gas), shipping and transportation, and gathering oil, gas, other hydrocarbon substances, water or any combination thereof.

Producing well tract means that surface area of land within the unit area attributable to a well producing from the unitized formation for purposes of determining such well's initial base allowable. Each producing well tract shall be established as of the day before the effective date of a unit agreement and, if applicable, the unit operating agreement corresponding thereto, and shall not be changed for purposes of this chapter.

Redrill means recompletion of an existing well by deepening or sidetrack operations extending more than 150 feet from the existing well bore.

Remaining primary reserves means that volumetric equivalent of recoverable oil and gas or oil or gas which shall be calculated as follows: original recoverable reserves underlying a producing well tract less the production of oil and gas or oil or gas from such producing well tract. Original recoverable reserves shall be that volumetric equivalent of recoverable oil and gas or oil or gas which underlay a producing well tract prior to any production and which is capable of being produced without the injection of liquids or gases into the unitized formation. If the production from a producing well tract shall be equal to or exceed the original recoverable reserves for such producing well tract, then the remaining recoverable reserves for such producing well tract shall be zero. Remaining primary reserves shall be determined as of the effective date of any unit agreement and, if applicable, the unit operating agreement corresponding thereto.

Reworking means recompletion of an existing well within the existing bore hole or by deepening or sidetrack operations which do not extend more than 150 feet from the existing well bore, or replacement of well liners or casings.

Right-of-way means public rights-of-way including streets, easements and other property within the city and which is dedicated to the use and benefit of the public.

Royalty interest means a right to, or interest in, any portion of the oil and/or gas or unitized substances or proceeds thereof, other than working interest.

Royalty owner means a person who owns a royalty interest.

Source of ignition means any flame, arc, spark or heated object or surface capable of igniting liquids, gases or vapors.

Street means any street, highway, sidewalk, alley, avenue, recessed parking area or other public right-of-way, including the entire right-of-way.

Sump or sump pit means an earthen pit, lined or unlined, for the discharge of oil field wastes.

Tank means a container, covered or uncovered, used in conjunction with the drilling or production of oil, gas or other hydrocarbons for holding or storing fluids.

Technical advisor means such person familiar with and educated in the oil and gas industry or the law as it relates to oil and gas matters as may be retained from time to time by the city.

Unit agreement means an agreement, approved by the commission pursuant to chapter 101 of the Natural Resources Code and all amendments thereto, for secondary or enhanced recovery operations within and from the unitized formation, or any portion thereof within the city, on a fieldwide or partial fieldwide basis.

Unit area means the land within the city or which may hereafter be in the city, and which is eligible to be within a unit for secondary or enhanced recovery operations as such may be extended or reduced from time to time as provided in a unit agreement or unit operating agreement or amendments thereto.

Unit operating agreement means an agreement entered into by and between working interest owners for purposes of conducting secondary or enhanced recovery operations, having the same effective date as a corresponding unit agreement, and shall include any and all amendments to such agreement.

Unit operations means all operations conducted pursuant to this chapter and any unit agreement and unit operating agreement.

Unit operator means the party designated by working interest owners under a unit operating agreement to conduct unit operations.

Unitized substances means all oil, gas, gaseous substances, sulphur contained in oil or gas, condensate, distillate, and all associated and constituent liquid or liquefiable hydrocarbons other than outside substances, as such substances are defined in a unit agreement or unit operating agreement that are found within the utilized formation and that may be produced from the unitized formation from wells within any unit area.

Well means a hole, bore, to any sand, horizon, formation, stratum or depth for the purpose of producing any oil, gas, liquid hydrocarbon, brine water or sulphur water, or for use as an injection well for secondary recovery, disposal or incident to any of the above.

Well servicing means the maintenance work performed within any existing well bore which does not involve drilling, redrilling or reworking.

Working interest means an interest in oil and/or gas or utilized substances by virtue of a lease, operating agreement, fee title, or otherwise, including a carried working interest, which interest is chargeable with, and obligated to pay, or bear, either in cash or out of production or otherwise, a portion of cost of drilling, developing, producing, and operating any well or unitized formation. A royalty interest created out of a working interest subsequent to the effective date hereof, shall continue to be subject to such working interest burdens and obligations as stated in any unit agreement and any corresponding unit operating agreement.

Working interest owner means a person who owns a working interest.

(Code 1973, § 13½-1; Ord. No. 91-2, § 1)

State law reference

Definitions relating to conservation of oil and gas, V.T.C.A., Natural Resources Code § 85.001; definitions relating to abandoned wells, V.T.C.A., Natural Resources Code § 89.002.