§ 79.32. Issuance of drilling permit.
(a) If a proper application has been filed under § 79.31 (relating to application requirements) and if all of the operators in the spacing unit have agreed to participate in the drilling of a well, or if all of the operators in the spacing unit have agreed to participate in the well except for some operators who have not agreed to participate, and the participating operators have agreed to advance the share of the cost attributable to the nonparticipating operators, and the time allowed the nonparticipating operators to come in and advance their share of the cost has elapsed, the drilling permit will be issued. In the event some of the operators have not agreed to participate in their share of the costs, the operators participating in the well shall keep an accurate record of all costs in connection with the drilling, equipping and operating of the well, and if the well is completed as a producer, shall file the complete record with the Department within a reasonable time. The operator shall also keep adequate production records, which shall be open for inspection to the Department or its agents, and to the nonparticipating operators, at reasonable business hours, to determine when twice the cost of drilling and equipping the well plus a reasonable charge for supervision, cost of operation and interest at the rate of 6% per annum has been paid. The participating operators may apply to the Department after notice to the nonparticipating operators and hearings, for determination of a reasonable charge for supervision. The participating operator shall be entitled to recover twice the nonparticipating operator’s share of the drilling and equipping costs, plus a reasonable charge for supervision, the cost of operation, and interest at the rate of 6% per annum, out of 7/8 of the nonparticipating operator’s share of the production. One-eighth of the share of the production attributable to the nonparticipating operator’s interest shall be paid to him from the time of the completion of the well.
(b) If there is a dispute as to the estimated or actual amount of cost, either the participating operators or the nonparticipating operators may apply to the Department to determine the actual cost or estimated cost.
(c) In instances where a well is completed prior to the integration of interests in a spacing unit, the sharing of production shall be from the effective date of the integration, except that in calculating costs credit shall be given for the value of each operator’s share of any prior production from the well.
Source The provisions of this § 79.32 adopted August 12, 1971, effective August 13, 1971, 1 Pa.B. 1726.
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