(a)
Deed restriction provisions.
Nothing contained in this
article shall be construed as authorizing the drilling of any well
where the operator has no legal authority to do so. It is expressly
provided that no well shall be drilled at any location where are of
public record legally enforceable deed restrictions or covenants prohibiting
the drilling of such well.
(b)
Necessity of contract with surface owner.
Neither this
article nor any permit issued under this article shall be interpreted
to grant any right or license to the permittee to enter upon, use
or occupy, in any respect, for the drilling or operation of any well,
any surface land except by the written contract of the surface owner;
nor shall it limit or prevent the free right of any owner to contract
for the amount of damages, rights or privileges with respect to his
own land and property.
(c)
Distance from residences, commercial buildings and other structures.
No well shall be drilled at any location which is nearer than
300 feet from any residence, commercial building, church, hospital,
rest home, public or parochial school, preschool, nursery or other
places of public assembly [unless the applicant furnishes to the city
manager written waivers executed by all owners of such residences,
commercial buildings, rest homes, preschools, nurseries, or other
places of public assembly] and governing body of such church, hospital
and schools which are located within 300 feet from the proposed well
location whereby the owners and/or governing body waive objections
to the well location. An existing well which has been previously plugged
and abandoned may be reentered at any location which is more than
200 feet from any residence, commercial building, church, hospital,
rest home, public or parochial school, preschool, nursery or other
place of public assembly that exists on the date the permit application
is properly filed with the city.
(d)
Location near cemeteries and parks.
No well shall be
drilled at any location which is on or less than 175 feet from the
exterior boundary line of lands utilized for cemeteries or public
parks.
(e)
Location near streets, alleys and easements.
No well
shall be drilled within or at any location nearer than 50 feet from
any dedicated street, alley or utility easement.
(1998 Code, sec. 4.521)
The area embraced within the corporate limits, having been found
by the city council to be urban in nature and therefore subject to
regulations for the safety, health and welfare of the citizens of
the city, is prescribed, and no permit for drilling of any well for
oil or gas within such area shall be issued except upon compliance
by the applicant with the conditions set forth below:
(1)
Within
the area defined in this section no oil well as classified by the
state railroad commission shall be drilled or completed except on
a unit comprising not less than 40 contiguous acres, plus or minus
10%, nor nearer to any other well for which a permit has been previously
issued than the minimum distance prescribed in this article. If the
railroad commission shall set a larger unit for an oil well, that
is, a unit comprising in excess of 40 acres, then and in that event
and in such case only, the determination of the railroad commission
shall prevail.
(2)
Within
the area defined in this section, no gas well as classified by the
railroad commission shall be drilled or completed except on a unit
comprising not less than 640 contiguous acres, plus or minus 10%,
nor nearer to any other well for which a permit has been previously
issued than the minimum distance prescribed in this article. If the
railroad commission shall set a smaller unit for a gas well, that
is, a unit comprising less than 640 contiguous acres, then and in
that event and in such case only, the determination of the railroad
commission shall prevail.
(1998 Code, sec. 4.522)
Voluntary unitization is encouraged in order to allow the efficient
recovery of oil and gas by the owner or lessee of an interest in oil
and gas beneath a tract of land in the city and to prevent the safety
problems of multiple well drilling in town lot areas. In order to
facilitate the orderly development of oil and gas production in the
city and to avoid confiscation of property, owners of oil and gas
interests required to be unitized shall be given the opportunity to
participate in the production of oil and gas from the drilling units
in which their property is located subject to the rules provided in
this article.
(1)
Procedure for unitization.
The procedure outlined herein
for the unitization of oil and gas interest is not intended to be
an exclusive method for unitizing such interest. Voluntary unitization
is authorized and encouraged as a substitute for the procedure outlined
herein. A voluntary unitization agreement between the various owners
will satisfy the unitization requirements contained in this article
insofar as they relate to those owners signing said unitization agreement.
If voluntary agreements cannot be reached with all of the owners of
oil and gas interests within a proposed production unit, the procedure
for unitizing all interests in such proposed production unit not voluntarily
unitized or owned by the applicant shall be as follows:
(A)
The applicant shall file an application to drill in accordance with the terms and provisions of this section and section 4.09.092, including the names and addresses of all owners of oil and gas interests within the proposed production unit covered by the application.
(B)
The owner of unleased minerals or the lessee of an oil and gas interest
shall be entitled to the following options wherein the lessee will
be responsible for discharging his obligations to his lessor:
(i)
Option No. 1.
He may elect to accept a one-fifth royalty based on his proportionate ownership in the unit and participate in the drilling and production of the well as a working interest owner based on four-fifths of his proportionate share of ownership in the unit, in which event he shall pay his share of all drilling and operating costs. If such owner or lessee elects to participate as an operating owner, he shall either post a certificate of insurance written by an approved bonding company as provided in section 4.09.048 or deposit cash with the applicant guaranteeing payment to the applicant of such working interest owner’s share in the following amounts: the estimated cost of drilling and completing the well and the estimated monthly operating expenses. If the cost of drilling and completing the well exceeds the estimated cost, such owner shall forthwith on demand pay his proportionate share of the excess to the applicant, or, if the actual costs are less than the estimate, such owner’s proportionate share of the difference shall be refunded by the applicant on demand. Such working interest owner shall advance to the applicant at monthly or other mutually acceptable intervals such owner’s share of estimated expenses of operating the production unit, or, at the election of applicant, such owner’s share of the operating expenses may be deducted by the applicant from revenues from production which otherwise would be payable to such owner as such expenses accrue.
(ii)
Option No. 2.
An unleased mineral owner or lessee
may elect to accept one-fifth royalty based on his proportionate share
of ownership in the unit and accept a $100.00 per acre payment based
on five-fifths of his mineral acres owned in the unit.
(C)
If the owner of unleased minerals or lessee, as the case may be, fails to elect between the options available to him within 30 days from the date of posting of the notice required in subsection (2), he shall be conclusively presumed to have elected to accept the provisions of Option No. 2. In the foregoing Options No. 1 and 2, the owners of unleased minerals or lessees, as the case may be, shall not be obligated to execute any leases, contracts or division orders except making a selection between the options if desired, in order to receive payments for bonuses, royalties or working interest proceeds as set out in the options. Anytime a permittee or his agent for distributing payments for the proceeds of production to mineral interests [fails to deliver payments to mineral interests] voluntarily included in a production unit through the requirements of this article, he shall notify the city mayor of said failure or inability to deliver such payments. The notification to the city mayor shall be delivered within 30 days after the failure to make payment as prescribed herein and shall set out the name and address of the mineral interest owner and give an explanation why the payment was not delivered as required. No minerals involuntarily included in a production unit through the requirements of this article shall be held by a permittee for a period longer than 90 days after the cessation of production in paying quantities unless drilling or work-over operations on the unit are taking place at the end of the 90 days and continued without cessation until restoring production in paying quantities to the unit. A permittee shall acquire no rights or privileges for the use of or to represent the surface of any mineral acreage involuntarily included in a production unit through the requirements of this section and section 4.09.092.
(2)
Notice to owners.
Notice to the owners (whose addresses
are known or are ascertainable by use of ordinary diligence) of the
oil and gas interests within the affected production unit which are
not under lease to the applicant and which are not covered by voluntary
unitization agreements shall be given as follows:
(A)
The applicant shall deliver or send by certified mail to all such
owners, at their last known address, a written notice which shall
include the following:
(i)
A legal description of the proposed production unit.
(ii)
Type of interest held by the owner being notified (royalty under
existing lease, mineral fee, lessee, overriding royalty and the like).
(iii)
A statement of the options available to the owner being notified.
(iv)
Notification that, if the owner fails to notify the applicant
in writing within 30 days from the date of posting of the notice to
each owner of the selection of one of the available options, the owner
will be conclusively presumed to have elected to accept Option No.
2.
(B)
In addition to the individual notification provided for above, the
applicant will cause to be published in one issue of a daily newspaper
published in the city a notice in substantial compliance with the
following form:
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Notice is hereby given that _____ (name of applicant) of _____ (address of applicant), pursuant to the provisions of article 4.09 of the Code of Ordinances, the Oil and Gas Drilling Ordinance of the City of Krum will, on or about the _____ day of _____ , 20_____, file with the city mayor an application for a permit to drill and/or operate a well, a general description of which is as follows: __________. A map showing the lands comprising said proposed production unit and the exterior boundaries thereof is on file in the office of the city mayor and is at said office subject to examination of all persons during regular officer hours. All interest within said proposed production unit will be unitized pursuant to sections 4.09.092 and 4.09.093. Owners of operating rights in land to be unitized have the option of: (1) participating in the drilling and production of the well as working interest owners; or (2) accepting a $100.00 per acre payment in lieu of the right to be a working interest owner. Owners who do not notify the applicant in writing of their election of one of the options available within 30 days of the date of this publication will be conclusively presumed to have elected to accept a payment in lieu of their right to participate as provided in section 4.09.093(1).
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(3)
Allocation of production.
Production from such unitized production units shall be allocated to tracts which are unitized under the provisions of this section and section 4.09.092 in the proportion that the surface acreage of each such individual tract has to the total surface acreage in the production unit. Owners of interests under such tracts shall share in the production allocated to the individual tracts on the basis of their interest therein. Production from the production unit in which the owner participates shall be treated as production from all of the tracts within the production unit.
(4)
Contracts between permittee and other owners.
The permittee
and owners of other mineral interests in any production unit shall
be able to alter the obligations as set out in this section by an
agreement made by them in writing, provided such agreement is not
in conflict with other provisions of this article.
(1998 Code, sec. 4.523)
(a)
Generally.
No geophysical work employing underground explosives shall be authorized or permitted within the city limits. Other geophysical exploration systems employing “thumper,” “vibroseis,” or other techniques not employing explosives shall be permitted upon proper application and payment of the permit fee as provided for in the fee schedule in appendix A of this code.
(b)
Application for permit; term of permit.
A proper application
will include the following:
(1)
Letter of application requesting a geophysical permit. The letter
shall set out the system to be employed, when it is intended to begin
the work and also the anticipated date of completion. A statement
shall also be made relieving the city of any liability for damages
which may result from that operation performed by the applicant.
(2)
The letter of application shall be accompanied by a certificate of
comprehensive general insurance in the amount of $1,000,000.00.
(3)
A plat outlining the areas proposed to be covered by the survey.
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The term of a seismic permit shall be for three months.
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(c)
Issuance of permit.
When the above is properly submitted,
the city mayor may issue a permit to the applicant to conduct such
seismic or geophysical work, if by his determination this work will
not create a public nuisance nor be contrary to the public safety.
The determination shall include the consideration of the following
factors:
(1998 Code, sec. 5.424)
(a)
Derricks.
All derricks and portable masts used for drilling,
redrilling, deepening or reworking shall meet the standards and specifications
of the American Petroleum Institute as they presently exist or may
be amended hereafter. All drilling, redrilling, deepening or reworking
equipment shall be removed from the oil operation site within 30 days
following the completion of drilling, redrilling, deepening or reworking
unless otherwise permitted by the commission.
(b)
Lights.
No person shall permit or allow any lights located
on any oil operation site to be directed in such a manner so that
they shine directly on adjacent property or property in the general
vicinity of the oil operation site.
(c)
Signs.
A sign shall be prominently displayed and maintained
in good condition near or on the pumping unit or fence of each well,
whether producing or not. Such sign shall be of durable material,
and unless otherwise required by the commission shall have a surface
area of not less than two square feet nor more than four square feet
and shall be lettered with the following:
(d)
“No smoking” signs.
“No smoking”
signs of a durable material shall be posted and maintained in all
locations. Sign lettering shall be four inches in height and shall
be red on a white background or white on a red background.
(e)
Waste material.
Rotary mud, drill cutting oil or liquid
hydrocarbons and all other oilfield wastes derived or resulting from
or connected with the drilling, redrilling, deepening or reworking
of any well shall be discharged into a portable steel tank. Unless
otherwise directed by the commission, waste materials shall be removed
from the operation site within 30 days from and after completion of
drilling.
(f)
Unlined slush or sump pits or skim ponds prohibited.
No person shall own, operate, have possession of, be in control of
or maintain any well site, former well site or property on which an
unlined slush, sump or sump pit or skim pond is located. The provisions
of this subsection shall not apply to portable sump tanks.
(g)
Surfacing of private roads and drill site.
Prior to
the commencement of any drilling operations, all private roads used
for access to the drill site and the drill site itself shall be surfaced
with crushed rock, gravel, or ore, or oil, and maintained to prevent
dust and mud. In particular cases these requirements governing surfacing
of private roads may be altered at the discretion of the city mayor
after consideration of all circumstances, including but not limited
to the following:
(1)
Distances from public streets and highways;
(2)
Distances from adjoining and nearby property owners whose surface
rights are not leased by the operator;
(3)
The purpose for which the property of such owners is or may be used;
(4)
Topographical features;
(5)
Nature of the soil; and
(6)
Exposure to wind.
(h)
Blowout prevention.
In all cases, protection shall be
provided to prevent blowout during oil operations as required by and
in conformance with the requirements of the commission.
(i)
Mufflers.
It shall be unlawful for any person, owner
or operator to discharge into the open air the exhaust from any internal
combustion engine, stationary or mounted on wheels, used in connection
with the drilling of any well or for use on any production equipment,
unless it is equipped with an exhaust muffler or mufflers or an exhaust
muffler box constructed of noncombustible materials sufficient to
suppress noise and prevent the escape of obnoxious gases, fumes or
ignited carbon or soot.
(j)
Noise, odor and vibration.
Subsection (i) notwithstanding, no person shall conduct any oil operation in a manner that would create a noise, odor or vibration detrimental to the health, safety or welfare of the surrounding neighborhood or any considerable number of persons. Such operation is declared to constitute a public nuisance.
(k)
Electrical equipment.
All electrical equipment used,
installed or maintained within 50 feet of a drilling rig, or within
25 feet of any other oil operation, shall be installed and maintained
in accordance with all applicable state and municipal regulations.
(l)
Tank specifications; dikes.
Unless otherwise directed
by the commission, all tanks used for the storage or production of
oil or the disposal of wastewater shall conform to the following:
(1)
API specifications.
All tanks shall conform to American
Petroleum Institute (API) specifications.
(2)
Dikes.
All persons owning, operating or having control
of storage tanks, clarifying tanks or tanks used in connection with
the production of oil shall construct and maintain dikes around said
tanks. Drainage dikes and walls shall be constructed and maintained
to meet the standards of the commission as they presently exist or
may hereafter be amended.
(m)
Tank setbacks.
All new tanks, including replacement
tanks and permanent structures, shall be set back pursuant to the
standards of the commission and the National Fire Protection Association,
as they presently exist or may hereafter be amended, but in all cases
shall be at least a minimum of 25 feet from any public right-of-way
or property line.
(n)
Storage of equipment; parking of vehicles or equipment.
(1)
No drilling, redrilling, reworking or other portable equipment shall
be stored on the oil operation site which is not essential to the
everyday operation of the oil well located thereon. This includes
the removal of idle equipment unnecessary for the operation of such
wells.
(2)
Lumber, pipes, tubing and casing shall not be left on the oil operation
site except when drilling or well servicing operations are being conducted
on the site.
(3)
It shall be illegal for any person, owner or operator to park or
store any vehicle or item of machinery on any street or right-of-way
or in any driveway or alley or upon any oil operation site which constitutes
a fire hazard or an obstruction to or interference with fighting or
controlling fires, except that equipment which is necessary for the
maintenance of the oil well site, or for gathering or transportation
of hydrocarbon substances from the site.
(o)
Removal of well servicing equipment.
All well servicing
equipment, including portable pulling masts and gin poles, shall be
removed from the leasehold, oil operation site or drill site within
seven days after completion of a well servicing operation.
(p)
Motive power.
Electric motors shall be used to drive
all pumping units except as expressly authorized by the city mayor.
(q)
Surface casing.
Surface casing shall be run and set
in full compliance with the applicable rules and regulations of the
commission and the state commission on environmental quality.
(1998 Code, sec. 4.525)
All wells and production facilities shall be adequately protected
by a fence; however, any wellhead, tank battery, pumping unit or equipment
appurtenant thereto located on any lease, tract or farm which is adequately
fenced in its entirety will require no additional fencing. Safety
precautions normally taken by reasonably prudent operators shall be
observed. Fences to prevent easy entry shall be approved by the city
mayor.
(1998 Code, sec. 4.526)
(a)
All
oil wells and tanks located in developed areas, as defined in this
article, shall be screened by a fence enclosure of one of the following
materials:
(b)
All
fencing, masonry walls, opaque slatting or other comparable materials
for use with chain-link fabric shall be of a solid neutral color,
compatible with surrounding uses, and maintained in a neat, orderly,
secure condition. Neutral colors shall include sand, gray and unobtrusive
shades of green, blue and brown or other colors approved by the city
mayor.
(1998 Code, sec. 4.527)
Within 60 days of completion of drilling, reworking or converting,
or within 60 days of activation of an idle well if such well is located
in a developed area as defined in this article, such well shall be
screened by a fence enclosure which conforms to the requirements of
this article and the regulations of the commission.
(1998 Code, sec. 4.528)
(a)
Cleanup after completion of servicing or abandonment.
After completion of well servicing or abandonment operations, the
responsible party shall clean the drill site and repair all damage
to public property caused by such servicing or abandonment operations.
(b)
Cleanup after spills, leaks and malfunctions.
After
any spill, leak or malfunction, the responsible party shall remove
or cause to be removed to the satisfaction of the fire chief all oil
and waste materials from any public or private property affected by
such spill, leak or malfunction.
(c)
Release of fluids.
No person shall deposit, place, discharge
or cause or permit to be placed, deposited or discharged any oil,
naphtha, petroleum, asphaltum, tar, hydrocarbon substances or any
refuse, including wastewater and brine, from any oil operation, or
the contents of any container used in connection with an oil operation,
in, into or upon a public right-of-way, a storm drain, ditch or sewer,
a sanitary drain or sewer, any body of water, or any private property
in the city.
(d)
Debris, weeds and other waste material.
All property
on which an oil well site is located shall at all times be kept free
of debris, pools of oil, water or other liquids, weeds, brush, trash
or other waste material.
(e)
Painting of equipment.
All production equipment on the
oil operation site shall be painted and maintained at all times, including
pumping units, storage tanks and buildings or structures. When requiring
painting of such facilities, the city mayor shall consider the deterioration
of the quality of the material of which such facility or structure
is constructed, the degree of rust and its appearance. Paint shall
be of a neutral color compatible with surrounding uses. Neutral colors
shall include sand, gray and unobtrusive shades of green, blue and
brown or other colors approved by the city mayor.
(f)
Gas emission or burning.
No person shall allow, cause
or permit gases to be vented into the atmosphere or to be burned by
open flame except as provided by law or as permitted by the commission.
If the venting of gases into the atmosphere or the burning of gases
by open flame is authorized as provided by law or as permitted by
the commission, then such vent or open flame shall be located not
closer than 100 feet to any building not necessary to oil operations
and such vent or open flame shall be screened in such a way as to
minimize detrimental effects to adjacent property owners.
(g)
Cleanup and repair of streets.
Any operator or permittee
under this article shall be responsible for any and all cleanup after
operations of any debris left on city streets and damage to city streets
and roadways relating to activity as prescribed by ordinance. In addition,
permittees and operators are responsible for damage to city streets
by use of trucks, equipment or any other vehicles or devices that
may cause damage as a result of drilling operations or activity as
permitted under this article.
(1998 Code, sec. 4.429)
(a)
Whenever
abandonment occurs pursuant to the requirements of the commission,
the person so abandoning shall be responsible for the restoration
of the drill site and oil operation site to its original condition
as nearly as practicable, in conformity with the regulations of this
article. It shall be the obligation of the operator to plug such well
in accordance with the laws of the state, the rules of the railroad
commission, the procedures outlined in this article and/or any other
agency having jurisdiction in connection with the abandonment or plugging
of such well. The operator shall submit to the city mayor’s
office 24 hours in advance of the plugging operation a notice of intent
to plug and abandon which will include the abandonment program and
request for release of permit. Whenever a drilling or reworking operation
has just been completed on a well and the operator desires to plug
and abandon such well, the 24-hour notice shall be reduced to no less
than a two-hour notice.
(b)
The
responsible party shall furnish the city mayor with:
(1)
A copy of the approval of the commission, confirming compliance with
all abandonment proceedings under the state law; and
(2)
A notice of intention to abandon under the provisions of this section
and stating the date such work will be commenced. Abandonment may
then be commenced on or subsequent to the date so stated.
(c)
Abandonment
shall be approved by the city mayor after restoration of the drill
site and the subsurface thereof has been accomplished in conformity
with the following requirements:
(1)
The derrick and all appurtenant equipment thereto shall be removed
from the drill site;
(2)
All tanks, towers and other surface installations shall be removed
from the drill site;
(3)
All concrete, piping, wood and other foreign materials, regardless
of depth, except surface casing, shall be removed from the drill site,
unless otherwise directed by the commission;
(4)
All holes and depressions shall be filled with clean, compatible
soil. All oil, waste oil, refuse or waste material shall be removed
from the drill site.
(d)
All
abandoned or deserted wells or drill sites shall meet the most current
abandonment requirements of the commission prior to the issuance of
any building or grading permit for the development of the property.
To the minimum extent practicable, new structures shall not be constructed
directly over abandoned wells.
(1998 Code, sec. 4.530)
(a)
Notice and hearing.
Whenever the city mayor determines
that a public nuisance as described in this article exists on any
property or in connection with any well, drill site or lease, he shall
give notice to the property owner, the lessee of surface or mineral
rights, the oil operator and the occupants of any such property to
abate such nuisance. The notice shall also state that, in the event
the nuisance is not abated as directed, the objectionable material
or condition may be removed and the nuisance abated by the city and
the cost of removal assessed upon the lands and buildings from which
the nuisance is removed, and such cost shall constitute a lien upon
such land until paid. The notice shall also specify a date and time
within 30 days of the date of the notice when the city council will
hold a public hearing to afford those so notified an opportunity to
be heard concerning the determination of the city mayor and the notice
to remove or eliminate the nuisance conditions. The city council may
direct the department of public works to proceed with the work necessary
to remove the objectionable conditions or materials and to take such
other action as is necessary to abate the nuisance.
(b)
Abatement by city.
The work shall proceed under the
direction of the city mayor and may be done by city forces or private
contractor. The individual in charge of the work shall keep a record
and account of the costs of abatement. Upon completion of the work,
a report shall be filed with the city secretary, who shall set a hearing
before the city council. The parties to be assessed shall be mailed,
by first class, prepaid mail, a notice of a public hearing on the
assessment.
(c)
Notice of lien.
If the cost of assessment is approved
by the city council after the hearing thereof, a notice of lien shall
be filed in the office of the county clerk for each parcel of land
involved, and when recorded shall be delivered by the city mayor to
the city tax assessor-collector, who is expressly authorized to enter
the amount thereof in the assessment book opposite the description
of the parcels, and thereafter such amount shall be collected at the
time and in the same manner as ordinary city taxes are collected,
and shall be subject to the same penalties and the same procedures
under foreclosure and sale in case of delinquency as provided for
ordinary city taxes. Notice to pay the assessment shall be sent to
the parties liable to be assessed.
(d)
Additional remedies.
As to any lots or property declared
to be a nuisance hereunder, the city attorney may proceed to abate
the same by filing a civil action to abate a nuisance against the
owner, or oil operators, or lessees or occupants thereon.
(1998 Code, sec. 4.531)
