2015 Arizona Revised Statutes
Title 27 - Minerals, Oil and Gas
§ 27-501 Definitions

27-501. Definitions

In this article, unless the context otherwise requires:

1. " Certificate of clearance" means a permit approved and issued or registered by the commission for transportation or delivery of oil, gas or oil and gas products.

2. " Certificate of compliance" means a certificate issued by the commission prior to connection of an oil or gas well with a pipeline, showing compliance with the conservation laws of this state and conservation rules and orders of the commission.

3. " Commission" or " commissioner" means the oil and gas conservation commission.

4. " Completed well" means a well that meets any of the following conditions:

(a) Has produced or is ready to produce new formation hydrocarbons or gases.

(b) Has been declared a dry hole or plugged and abandoned.

(c) Has been otherwise readied for operation as in the case of injection and service wells.

5. " Developed area" or " developed unit" means a drainage unit having a completed well capable of producing oil or gas in paying quantities.

6. " Drainage unit" or " drilling unit" means the maximum area in a pool which may be drained efficiently by one well to produce the reasonable maximum amount of recoverable oil or gas in the area.

7. " Field" means the general area which is or appears to be underlaid by not less than one pool, including underground reservoirs containing oil or gas, or both.

8. " Fund" means the state general fund.

9. " Gas" means natural gas, casinghead gas, all other hydrocarbons not defined as oil, carbon dioxide and helium or other substances of a gaseous nature. Natural gas and casinghead gas are further defined as follows:

(a) " Natural gas" means any combustible gas or vapor composed chiefly of hydrocarbons occurring in gaseous or vapor phase at initial reservoir conditions.

(b) " Casinghead gas" means any gas or vapor indigenous to an oil stratum and produced from such stratum with oil.

10. " Illegal oil" and " illegal gas" means oil or gas produced within the state from any well during any time in which the well has produced more than the amount allowed by law or any rule or order of the commission or the production of which causes waste.

11. " Illegal product" means any product derived, in whole or in part, from illegal oil or gas.

12. " Net drainage" means drainage not equalized by counterdrainage.

13. " Oil" means crude petroleum oil and all other hydrocarbons, regardless of gravity, which are produced at a well in liquid form by ordinary production methods and which are not the result of condensation of gas.

14. " Owner" means the person having the right to drill into, produce and appropriate production of oil or gas, or both, from a pool.

15. " Person" includes a corporation, association, partnership, receiver, trustee, guardian, executor, administrator, fiduciary or representative or any group acting as a unit and includes any department, agency or instrumentality of the state or any of its governmental subdivisions.

16. " Pool" means an underground reservoir containing a common accumulation of oil or gas, or both, and includes each zone of a general structure completely separated from any other zone in the structure.

17. " Producer" means the owner of a well capable of producing oil or gas.

18. " Product" means oil, gas or any product, by-product, mixture or blend of oil or gas.

19. " Royalty owner" means a person who possesses an interest in the production but who is not an owner.

20. " Waste" includes:

(a) Physical waste, as that term is generally understood in the oil and gas industry.

(b) The inefficient, excessive or improper use of or the unnecessary dissipation of reservoir energy.

(c) The locating, spacing, drilling, equipping, operating or producing of any oil or gas well or wells in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations or which causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas.

(d) The inefficient storing of oil or gas.

(e) The production of oil or gas in excess of transportation or marketing facilities.

(f) The production of oil or gas when it is unprofitable to dispose of such production.

21. " Well" includes any hole drilled or spudded in for the purpose, with the intention or under the representation of penetrating oil or gas bearing strata or of penetrating any strata in search of stratigraphic data pertinent to the location of oil or gas bearing strata, whether or not in either case oil or gas is actually discovered, any hole used in connection with the underground storage of hydrocarbon substances, whether liquid or gaseous, any hole used in connection with a process to inject any substance for purposes of disposal or to increase recovery, any hole used for the purpose of secondary or tertiary recovery and any hole used for the purpose of pressure maintenance. The commission may, as it considers to be in the best interests of the state, determine that any hole drilled or spudded in shall be included within this definition to the extent necessary for the administration and enforcement of the rules required by section 27-516. The determination of the commission shall be final in any circumstance involving the question of purpose, intent or representation, except that the determination shall be subject to appeal as provided by section 27-520.