Title 27 — Minerals, Oil and Gas

A. The department on its initiative and with the approval of the selection board may elect to receive royalty oil in kind from a lessee in lieu of a cash royalty, and the department may resell such royalty oil in the manner provided by the selection board. B. An Arizona refinery …

A. An Arizona refinery business may apply to the department to purchase royalty oil which the department elects to receive from a lessee. The application shall be filed not more than fifteen weeks nor less than thirteen weeks before the date of sale of the royalty oil by the depa…

A. Not less than eleven weeks before the sale of royalty oil by the department, the department shall give the lessee written notice of the department's election to receive the quantity of royalty oil on the date specified by the department. B. If the notice of election is pursuan…

A. The royalty oil which the department receives pursuant to an election under section 27-564 shall be offered for sale by the department at 10:00 a.m. on the date of delivery of the royalty oil to the department. B. The application fee and procedure for sale shall be as prescrib…

Royalty oil sold pursuant to section 27-567 shall be delivered to the buyer at the earliest time following the declaration of the highest and best bidder and payment to the department.

Sale of royalty oil under this article is for processing or use in the purchaser's refineries but not for resale in kind. Agreements providing for the exchange of refinery charge stocks on a volume or equivalent value basis are not a resale in kind prohibited by this section. If …

A. If the department requires a bond to guarantee performance by the buyer, the amount shall be based on the average price of royalty oil sold in this state during the preceding month. If no royalty oil was sold in this state during the preceding month, the amount of the bond sha…

A. The state land commissioner or the commissioner's agent may inspect any well records that are required to be filed with the oil and gas conservation commission but shall keep confidential all information that is not subject to inspection as provided by section 27-522. B. For t…

The governor is authorized and directed, for and in the name of the state, to join with the other states in the interstate oil compact to conserve oil and gas, which was executed in the city of Dallas, Texas, on February 16, 1935, and is now on deposit with the United States depa…

The governor is authorized, for and in the name of the state, to execute agreements for the further extension of the expiration date of the interstate compact to conserve oil and gas, and to determine if and when it is to the best interest of the state to withdraw from the compac…

The governor shall be the official representative of the state on the interstate oil compact commission provided for in the compact, and shall exercise and perform for the state all the powers and duties as a member of the commission. The governor may appoint an assistant represe…

In this article, unless the context otherwise requires: 1. "Commission" means the oil and gas conservation commission. 2. "Completion" or "completed well" means a well that has produced or is capable of producing geothermal resources or has been determined to be a dry hole, tempo…

A. The commission shall so supervise the drilling, operation, maintenance and abandonment of geothermal resource wells as to encourage the greatest ultimate economic recovery of geothermal resources, to prevent damage to and waste from underground geothermal reservoirs, to preven…

The commission shall collect all information regarding all wells drilled in the state for geothermal resources and necessary for the purpose of supervision of such wells. All such data shall be filed in the commission office and, upon request of the operator, shall be kept confid…

A. The commission shall require every person who engages in the drilling, ownership or operation of a well, or the entering or deepening of an abandoned well, to file with the commission, on a form to be determined by the commission, a reasonable bond with good and sufficient sec…

The commission shall have jurisdiction over any stimulation, induction or creation of a geothermal resource. Prior to any operation involving the stimulation, induction or creation of a geothermal resource, or any combination thereof, approval of the commission must be obtained. …

A. The commission shall adopt rules necessary for the proper administration and enforcement of this article. B. The commission shall comply with title 41, chapter 6 in adopting, modifying, renewing or extending rules under this article. C. Any order, or change, renewal or extensi…

Every owner or operator of any well shall designate an agent who resides in this state upon whom may be served all orders, notices and processes of the commission or of any court of law. Every person so appointing an agent shall, within ten days after the termination of any such …

A. The owner or operator of any well shall notify the commission in writing on such form as the commission may direct of the sale, assignment, transfer or conveyance or exchange by the owner or operator of such well and the land owned or leased upon which the well is located with…

The owner or operator of any property, before commencing the drilling of a well or entering or deepening an abandoned well, shall file with the commission an application to drill, on a form prescribed by the commission, containing such information as may be required by the commis…

Any person engaged in the drilling of a well for geothermal resources in an area wherein fluids, gases or steam under high pressure are known to exist, or any person drilling a well for geothermal resources in any area where pressures are not known, shall case in a watertight man…

The owner or operator of any well shall keep, or cause to be kept, a log, core record and drilling history, copies of which shall be filed with the commission no later than thirty days following the completion of drilling the well. A complete set of samples of the drill bit cutti…

The owner or operator of any well producing geothermal resources shall file with the commission on or before the twenty-fifth day of the next succeeding month a monthly producers report, setting forth the total production from each well and such other information as may be determ…

Any owner or operator or employee thereof who knowingly refuses to permit the commission to inspect a well or who knowingly hinders or delays enforcement of the provisions of this chapter, and every person, whether as principal agent, servant or employee, or otherwise, who violat…

Whenever the commission finds that it is in the interest of the protection of the geothermal resources of this state from unreasonable waste, the lessors, lessees, operators, owners or other persons holding or controlling royalty or other interest in separate properties within th…

A. No order of the commission creating a unit and prescribing the plan of unitization applicable thereto shall become effective unless and until the plan of unitization has been signed, or in writing ratified or approved by the owner or lessees of record of not less than sixty-th…

A. When two or more separately owned tracts of land are embraced within an established drilling unit, persons owning the drilling rights therein and the right to share in the production therefrom may agree to pool their interests and develop their lands as a drilling unit. If the…

A. Geothermal resources and their development shall be exempt from the water laws of this state unless either: 1. Such resources are commingled with surface waters or groundwaters of this state. 2. Such development causes impairment of or damage to the groundwater supply. B. In t…

A. The department may lease state lands for the development of geothermal resources and sell geothermal resource leases as provided in this article. B. The department may prescribe rules and regulations necessary and appropriate to carry out the purposes of this section and to pr…

The department may determine and designate the known geothermal resource areas. The determinations and designations shall be published twice in a newspaper of general circulation in this state, the last publication to be not less than five days from the first date of publication.…

A. Applications for leases shall be in writing addressed to the department and shall contain a description of the lands sufficient to identify them, the name and address of the applicant and shall be accompanied by a filing fee of twenty-five dollars. Each application shall be st…

A. The leases shall provide for the payment by the lessee of a royalty of not less than twelve and one-half per cent of the gross value of the resource at the well head. B. The leases shall provide for an annual rental of not less than one dollar per acre for each year that the l…

A. Each lease issued under the provisions of this article shall provide that the lessee, insofar as its interest is affected, may join, with the department's prior written approval, in cooperative or unit plans for the development and operation of geothermal resource pools with t…

The lessee shall have the right to use as much of the surface of the lands as reasonably necessary for its operations under the lease as determined by the department. The lessee shall be liable for damage caused by it to the state's interest in the surface and to the interest of …

A. In event of the assignment of a lease as to a segregated portion of the land, the rentals payable shall be apportioned between the portions according to the surface area of each. If the lease is assigned in whole or in part, liability for the breach of any obligation under the…

At the discretion of and upon prior written approval of the department, a lessee may surrender a portion of the lands covered by the lease at any time upon payment to the department of all amounts then due as to the lands surrendered, but no refund of any part of the cash conside…

A. If it appears that a person is violating any provision of this article, or a rule or order made pursuant to this article, and the person fails or refuses, on notice by the commission, to desist from the violation, the commission may bring an action in superior court in the cou…

A. In any action brought pursuant to section 27-676 against a person who violates any provision of this article, or any rule or order of the commission, the court may impose a civil penalty of not more than one thousand dollars for each violation and for each day the violation co…