11 AAC 83.356. Unit area; contraction and expansion

(a) A unit must encompass the minimum area required to include all or part of one or more oil or gas reservoirs, or all or part of one or more potential hydrocarbon accumulations.

(b) 10 years after sustained unit production begins, the unit area must be contracted to include only those lands then included in an approved participating area and lands that facilitate production including the immediately adjacent lands necessary for secondary or tertiary recovery, pressure maintenance, reinjection, or cycling operations. The commissioner will, in the commissioner's discretion, after considering the provisions of 11 AAC 83.303, delay contraction of the unit area if the circumstances of a particular unit warrant. If any portion of a lease is included in the participating area, the portion of the lease outside the participating area will neither be severed nor will it continue to be subject to the terms and conditions of the unit. The portion of the lease outside the participating area will continue in full force and effect so long as production is allocated to the unitized portion of the lease and the lessee satisfies the remaining terms and conditions of the lease.

(c) Any expansion or contraction of the unit area must be based on legal subdivisions of land as defined in 11 AAC 88.185.

(d) No land will be excluded from a unit area due to the depletion of hydrocarbons.

(e) Not sooner than 10 years after the effective date of the unit agreement, the commissioner will, in the commissioner's discretion, contract the unit area to include only that land covered by an approved unit plan of exploration or development, or that area underlain by one or more oil or gas reservoirs or one or more potential hydrocarbon accumulations and lands that facilitate production as set out in (b) of this section. Before any contraction of the unit area under this subsection, the commissioner will give the unit operator, the working interest owners, and the royalty owners of the leases or portions of leases being excluded reasonable notice and an opportunity to be heard.

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

Authority: AS 38.05.020

AS 38.05.145

AS 38.05.180

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