2005 Idaho Code - 47-322 — INTEGRATION OF TRACTS -- ORDERS OF COMMISSION

                                  TITLE  47
                               MINES AND MINING
                                  CHAPTER 3
                        OIL AND GAS WELLS -- GEOLOGIC
                     INFORMATION, AND PREVENTION OF WASTE
    47-322.  INTEGRATION OF TRACTS -- ORDERS OF COMMISSION. (a) When two (2)
or more separately owned tracts are embraced within a spacing unit, or when
there are separately owned interests in all or a part of a spacing unit, the
interested persons may integrate their tracts or interests for the development
and operation of the spacing unit. In the absence of voluntary integration,
the commission, upon the application of any interested person, shall make an
order integrating all tracts or interests in the spacing unit for the
development and operation thereof and for the sharing of production therefrom.
The commission, as a part of the order establishing a spacing unit or units,
may prescribe the terms and conditions upon which the royalty interests in the
unit or units shall, in the absence of voluntary agreement, be deemed to be
integrated without the necessity of a subsequent separate order integrating
the royalty interests. Each such integration order shall be upon terms and
conditions that are just and reasonable.
    (b)  All operations, including, but not limited to, the commencement,
drilling, or operation of a well upon any portion of a spacing unit for which
an integration order has been entered, shall be deemed for all purposes the
conduct of such operations upon each separately owned tract in the spacing
unit by the several owners thereof. That portion of the production allocated
to a separately owned tract included in a spacing unit shall, when produced,
be deemed, for all purposes, to have been actually produced from such tract by
a well drilled thereon.
    (c)  Each such integration order shall authorize the drilling, equipping,
and operation, or operation, of a well on the spacing unit; shall provide who
may drill and operate the well; shall prescribe the time and manner in which
all the owners in the spacing unit may elect to participate therein; and shall
make provision for the payment by all those who elect to participate therein;
of the reasonable actual cost thereof, plus a reasonable charge for
supervision and interest. If requested, each such integration order shall
provide for one or more just and equitable alternatives whereby an owner who
does not elect to participate in the risk and cost of the drilling and
operation, or operation, of a well may elect to surrender his leasehold
interest to the participating owners on some reasonable basis and for a
reasonable consideration which, if not agreed upon, shall be determined by the
commission, or may elect to participate in the drilling and operation, or
operation, of the well, on a limited or carried basis upon terms and
conditions determined by the commission to be just and reasonable. If one or
more of the owners shall drill, equip, and operate, or operate, or pay the
costs of drilling, equipping, and operating, or operating, a well for the
benefit of another person as provided for in an order of integration, then
such owners or owner shall be entitled to the share of production from the
spacing unit accruing to the interest of such other person, exclusive of a
royalty not to exceed one-eighth (1/8) of the production, until the market
value of such other person's share of the production, exclusive of such
royalty, equals the sums payable by or charged to the interest of such other
person. If there is a dispute as to the costs of drilling, equipping, or
operating a well, the commission shall determine such costs. 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 the owner's share of any prior production from the well.