Title 27 — Minerals, Oil and Gas

A. Monies collected by the commissioner under this article shall be deposited, pursuant to sections 35-146 and 35-147, in the fund. B. Expenses incident to the administration of this article shall be paid from the fund, subject to legislative appropriation.

A. When it appears that a person is violating or threatening to violate any provision of this article, or a rule, regulation or order made pursuant to this article, and such person fails or refuses, on notice by the commissioner, to desist from such violation or threat of violati…

A. No temporary restraining order or injunction shall be granted against the commissioner or his agent, employee or representative to restrain enforcement of a statute relating to the conservation of oil and gas or any provision of this article, or rule, regulation or order made …

In an action brought under this article, or an action which involves any rule, regulation or order made under this article, any party to the action shall have the right to appeal from the superior court to the supreme court as provided by law or rules of court relating to appeals…

A. Any person who violates any provision of this article, or any rule, regulation or order of the commission, is subject to a civil penalty of not more than one thousand dollars for each violation and for each day the violation continues. B. Any person who, with the intent to eva…

A. To prevent or to assist in preventing waste, to insure a greater recovery of oil and gas, and to protect the correlative rights of persons owning interests in the tracts of lands affected, such persons may validly integrate their interests to provide for the unitized managemen…

The order of the commission shall define the area of the pool or portion thereof to be included within the unit area and prescribe with reasonable detail the plan of unitization applicable thereto. Each unit and unit area shall be limited to all or a portion of a single pool. Onl…

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 lessees of record of not less than sixty-three per cent …

From and after the effective date of an order of the commission creating a unit and prescribing the plan of unitization applicable thereto, the operation of any well producing from the pool or portion thereof within the unit area defined in the order by persons other than the uni…

A. The obligation or liability of the lessees or other owners of the oil and gas rights in the several separately owned tracts for the payment of unit expense shall at all times be several and not joint or collective and in no event shall a lessee or other owner of the oil and ga…

A. Property rights, leases, contracts and all other rights and obligations shall be regarded as amended and modified to the extent necessary to conform to the provisions and requirements of this article, and to any valid and applicable plan of unitization or order of the commissi…

The unit area of a unit may be enlarged to include adjoining portions of the same pool, including the unit area of another unit, and a new unit created for the unitized management, operation and further development of such enlarged unit area, or the plan of unitization may be oth…

Any unit agreement approved by the commission shall contain language suggested by the internal revenue service under I.T. 3930 and I.T. 3948 so that owners in the unitized area will not be held taxable as a corporation.

An agreement for the unit or cooperative development and operation of a field, pool, or part thereof, may be submitted to the commission for approval as being in the public interest or reasonably necessary to prevent waste. Such approval shall constitute a complete defense to any…

In this article, unless the context otherwise requires: 1. "Arizona refinery business" means a firm which markets in this state the product refined from royalty oil purchased under this article and which either owns and controls an oil refinery located within this state or is an …

The department may prescribe rules and regulations necessary and appropriate to carry out the purposes of this article.

The department may lease state lands for oil and gas and issue oil and gas leases as provided in this article.

A. The department shall from time to time determine and designate the known geological structures of producing oil and gas fields. The determinations and designations shall be published twice in a newspaper of general circulation in the state, the last publication to be not less …

A. When state lands are not located within any known geological structure of a producing oil and gas field, as determined pursuant to section 27-554, the person making the first application for the lease shall be issued a lease covering the lands without competitive bidding. B. T…

A. When the owner of an oil and gas lease issued pursuant to this chapter has discovered oil or gas on the leased premises or on lands joined therewith in a cooperative or pooled unit, while the lease is in full force and effect, but is unable to produce oil or gas in paying quan…

When state lands are located within a known geological structure of a producing oil or gas field, as determined pursuant to section 27-554, the lands shall be leased only by sealed bids, as follows: 1. Upon receipt of an application to lease any of such lands or whenever, in the …

A. Each lease issued under the provisions of this article shall provide that the lessee, insofar as its interest in the lease is affected, may join in cooperative or unit plans for the exploration, development and operation of oil and gas pools with the United States, its agencie…

The development of oil and gas leases issued pursuant to this article shall be in accordance with the laws of the state relating to the conservation of oil and gas.

A. A lessee shall have the right to develop water for use in its operations subject to the applicable laws of the state pertaining to drilling water wells and using water produced therefrom. B. If any well drilled for oil or gas on a lease issued pursuant to this article fails to…

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. The lessee shall be liable for damage caused by it to the state's interest in the surface or to the interest of the surface lessee, if any, and m…

A. In event of the assignment of a lease as to a segregated portion of the land covered thereby, the rentals payable thereunder shall be apportionable between the several leasehold owners ratably according to the surface area of each. Default in rental payment by one shall not af…

A lessee may surrender any part or all 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 consideration or rental theretofore paid shall be made to the lessee upon…

Royalties payable to this state under section 27-555, subsection B are payable in kind or in cash at the option and demand of the department. The lessee shall pay royalties in cash unless the department elects to receive royalty oil in kind pursuant to this article. The commissio…

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…