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(1) The board is authorized to enter into pooling agreements and unit agreements for the purpose of pooling and unitizing state lands held under oil and gas leases with other lands. In connection with such agreements the board is authorized to modify any state lease with respect to delay rentals, delay drilling penalties, and royalties in accordance with such pooling agreements and such unit plans of operation; however, no such agreement may change the percentage of royalties to be paid to the state from the percentage as fixed in the lease computed on the production of oil and gas allocated to the state lands within such pooled or unitized areas. Oil and gas produced from any part of a unit in which state lands are included by virtue of a pooling or unit agreement are considered to be produced from the state lands therein for purposes of these rules and regulations.

(2) No particular form of pooling agreement or unit agreement is prescribed or required by the board. However, if the unit agreement is in form as prescribed by the United States geological survey for unitized operations affecting federal lands, the commitment of state lands to such unit agreement will normally be effected by means of the execution by the board of an approval and certification on the form adopted by the board on June 12, 1968. In all cases it is recommended, although not required, that the proposed form of pooling agreement or unit agreement be submitted to the board for preliminary approval prior to execution by the other participants.

History: 77-3-402, MCA; IMP, 77-3-430, MCA; NEW, Eff. 12/5/75; TRANS, 1996 MAR p. 2384.

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