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A BILL TO BE ENTITLED
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AN ACT
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relating to oil and gas wells that traverse multiple tracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 85.046, Natural Resources Code, is |
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amended by adding Subsection (d) to read as follows: |
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(d) Unless expressly prohibited by a lease, deed, or other |
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contract, an operator or lessee with the right to drill an oil or |
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gas well on or produce or develop oil or gas from each tract |
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independently may, under a permit issued by the commission, drill, |
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operate, and produce oil or gas from an oil or gas well that |
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traverses multiple tracts in order to prevent waste, promote |
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conservation, or protect correlative rights. If there is not an |
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agreement among any of the affected owners of royalty or mineral |
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interests in the tracts regarding the manner in which production |
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from the well shall be allocated among the tracts, the production |
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shall be allocated to each tract in the proportion that the operator |
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or lessee reasonably determines reflects the amount produced from |
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each tract. The operator or lessee must send written notice of the |
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production allocation to each affected royalty or mineral interest |
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owner at the owner's last known address. If an owner of a royalty or |
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mineral interest in a tract enters into an agreement with the |
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operator or lessee regarding the manner in which production from |
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the well shall be allocated to the tract, the agreement prevails |
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over the allocation determined by the operator or lessee under this |
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subsection. On application of an affected person, the commission, |
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after notice and opportunity for hearing, may determine whether a |
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production allocation under this subsection: |
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(1) will harm the correlative rights of the working or |
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royalty interest owners; |
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(2) is necessary to prevent waste or adequately |
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protect the correlative rights of the affected owners; and |
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(3) accurately attributes to each affected interest |
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owner its fair share of the aggregated production. |
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SECTION 2. If any provision of this Act or its application |
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to any person or circumstance is held invalid, the invalidity does |
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not affect other provisions or applications of this Act that can be |
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given effect without the invalid provision or application, and to |
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this end the provisions of this Act are declared to be severable. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |