11 AAC 83.371. Allocation of production and costs

(a) The proposed or revised division of interest or formula allocating hydrocarbon production and unit operating costs among the leases in the unit area may not take effect until approved by the commissioner in writing. When requested by the commissioner, the lessees or unit operator shall promptly file with the commissioner all data that relates to the proposed or revised division of interests or allocation formula for all leases in the participating area. Before any disapproval of the proposed or revised division of interest or allocation formula, the commissioner will give the working interest and royalty owners reasonable notice and an opportunity to be heard. After the hearing, the commissioner will approve the proposed or revised division of interest or allocation formula as submitted unless the commissioner finds in writing that the formula does not equitably allocate production and costs among the leases.

(b) If there is a separate division of interest or allocation formula among any of the parties holding an interest in the unit that is different from the division of interest or allocation formula approved by the commissioner, the parties to the separate division of interest or allocation formula not approved by the commissioner shall submit a copy of that formula to the commissioner and a statement explaining the reasons for the difference.

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

Authority: AS 38.05.120

AS 38.05.145

AS 38.05.180

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