11 AAC 83.373. Severance

(a) Except as otherwise provided in this section and 11 AAC 83.356, where only a portion of a lease is committed to a unit agreement approved or prescribed by the commissioner, the commitment constitutes a severance of the lease as to the unitized and nonunitized portions of the lease. The portion of the lease not committed to the unit will be treated as a separate and distinct lease having the same effective date and term as the original lease and may be maintained thereafter only in accordance with the terms and conditions of the original lease, statutes, and regulations. Any portion of the lease not committed to the unit agreement will not be affected by the unitization or pooling of any other portion of the lease by operations in the unit, or by suspension approved or ordered for the unit under 11 AAC 83.336(b) .

(b) The commissioner will, in his discretion, grant up to a two-year extension of the lease term for that portion of a lease not committed to the unit agreement under this section.

(c) A lease having a well certified as capable of production in paying quantities before commitment to the unit agreement will not be severed.

History: Eff. 9/5/74, Register 51; am 7/22/79, Register 71; am 6/28/81, Register 78; am 8/15/82, Register 83

Authority: AS 38.05.020

AS 38.05.145

AS 38.05.180

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