Utah Admin. Code R850-21-175 - Definitions
Except as specifically defined below, the definitions set forth at R850-1-200 shall be applicable. The following words and terms, when used in Section R850-21, shall have the following meanings:
1.
Anniversary Date: the same day and month in succeeding years as the effective
date of the lease.
2.
Assignment(s): a transfer of all or a portion of the lessee's record title or
operating rights in a lease.
(a) Mass
Assignment: an assignment that affects two or more leases and identifies the
leases affected thereby on an attached exhibit to the assignment.
(b) Non-leasehold Assignment: an assignment
that transfers an interest in a lease that is not record title or operating
rights, for example, but not limited to, overriding royalty, net profits, or
other production payments.
3. Certification of Net Revenue Interest: a
written declaration of oath to the agency that must accompany assignments of
record title or operating rights in leases issued beginning April 1, 2005,
certifying that the total net revenue interest (NRI) in the lease has not been
reduced to less than 80 percent of 100 percent NRI.
4. Designated Operator: the person or entity
that has been granted authority through a Designation of Operator form to
conduct operations on the lease or a portion thereof.
5. Diligent Operations: the continuation of
drilling or reworking operations in the secondary term of the lease which are
prosecuted in a timely and good and workmanlike manner to establish production
or restore production of leased substances. Diligent Operations may include
cessations of operations which do not exceed ninety (90) days in duration or a
cumulative period in excess of one hundred eighty (180) days in a lease year
without prior agency approval.
6.
Effective Date: the date as defined in the lease.
7. Gas Well: a well capable of producing
volumes exceeding 100,000 cubic feet of gas to each barrel of oil from the same
producing horizon where both oil and gas are produced; or, a well producing gas
only from a formation or producing horizon.
8. Lease Year: the twelve-month period
commencing at 12:01 a.m. on the month and day of the effective date of the
lease and ending at midnight on the last day of the twelfth month.
9. Minimum Royalty: the minimum amount of
money payable to the agency which accrues beginning in the first year of the
secondary term of the lease or after first production is obtained. The amount
due is calculated on the difference, if any, between the amount of the minimum
royalty specified in the lease and the actual royalty paid from production in
the lease year.
10. Operating
Rights Interest: the interest or contractual obligation created out of a lease
that authorizes the operating rights interest owner to enter upon the leased
land to conduct drilling, production and other related operations. Operating
rights interest may be stratigraphically limited.
11. Other Business Arrangement (OBA): an
agreement entered into between the agency and a person or entity consistent
with Section
53C-2-401
-(1)(d)(ii) and approved by the Board of Trustees. By way of example, but not
of limitation, OBAs may be for joint ventures, farmout agreements, exploration
agreements, or other agreements for the disposition of hydrocarbon deposits on
trust lands.
12. Paying Quantities:
unless otherwise defined in the lease, production that allows the lessee to
realize a profit after deducting taxes, the agency's royalty, and the cost of
the operations.
13. Record Title
Interest: the primary ownership of a lease that includes the obligation to pay
rentals, the rights to assign or relinquish a lease, and the ultimate
responsibility to the agency for obligations under the lease. Record title
interest to a lease may not be stratigraphically limited.
14. Rental: a sum of money as prescribed in
the lease payable annually in advance to the agency on or before midnight on
the last day of the lease year.
15.
Shut-in Gas Well: a gas well that is physically capable of producing gas in
paying quantities that cannot be marketed at a reasonable price due to lack of
market or transportation facilities, the status of which has been confirmed
through the filing of a completion report or other documentation with
UDOGM.
16. Shut-in Gas Well
Payment: beginning at the commencement of the secondary term of the lease, the
amount of money accruing and payable to the agency, in addition to other
obligations defined in the lease, when gas is not being sold or marketed from
the lease for a shut-in gas well.
17. Spud: the first boring of a hole in the
drilling of a well and continuation of operations until surface casing is
set.
18. UDOGM: the Division of
Oil, Gas, and Mining of the Department of Natural Resources of the State of
Utah.
Notes
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