11 AAC 83.395. Definitions

Unless the context clearly requires a different meaning, in 11 AAC 83.301 - 11 AAC 83.395 and in the applicable unit agreements

(1) "conservation of the natural resources of all or part of an oil or gas pool, field or like area" means maximizing the efficient recovery of oil and gas and minimizing the adverse impacts on the surface and other resources;

(2) "commissioner" means the commissioner of the state Department of Natural Resources or his designee;

(3) "force majeure" means war, riots, acts of God, unusually severe weather, or any other cause beyond the unit operator's reasonable ability to foresee or control and includes operational failure to existing transportation facilities and delays caused by judicial decisions or lack of them;

(4) "paying quantities" means quantities sufficient to yield a return in excess of operating costs, even if drilling and equipment costs may never be repaid and the undertaking considered as a whole may ultimately result in a loss; quantities are insufficient to yield a return in excess of operating costs unless those quantities, not considering the costs of transportation and marketing, will produce sufficient revenue to induce a prudent operator to produce those quantities;

(5) "potential hydrocarbon accumulation" means any structural or stratigraphic entrapping mechanism which has been reasonably defined and delineated through geophysical, geological, or other means and which contains one or more intervals, zones, strata, or formations having the necessary physical characteristics to accumulate and prevent the escape of oil and gas;

(6) "reservoir" means an oil or gas accumulation which has been discovered by drilling and evaluated by testing and which is separate from any other accumulation of oil and gas;

(7) "unit" means a group of leases covering all or part of one or more potential hydrocarbon accumulations, or all or part of one or more adjacent or vertically separate oil or gas reservoirs, which are subject to a unit agreement;

(8) "unit agreement" means the agreement executed by the State of Alaska, working-interest owners, and royalty owners creating the unit; and

(9) "sustained unit production" means continuing production of oil or gas from a reservoir in the unit area into a pipeline or other means of transportation to market, but does not include testing, evaluation, or pilot production.

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

Authority: AS 38.05.020

AS 38.05.145

AS 38.05.180

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