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TX NATURAL RESOURCES CODE

TITLE 3. OIL AND GAS

SUBTITLE A. ADMINISTRATION

CHAPTER 89. ABANDONED WELLS

SUBCHAPTER C. POWERS AND DUTIES OF THE COMMISSION



§ 89.041. DETERMINING PROPER PLUGGING.
     If it comes to the attention of the commission that a well that has been abandoned or is not being operated is causing or is likely to cause pollution of fresh water above or below the ground or if gas or oil is escaping from the well, the commission may determine at a hearing, after due notice, whether or not the well was properly plugged as provided in Section 89.011 or Section 89.012 of this code.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, eff. Aug. 29, 1983.

§ 89.042. COMMISSION ORDER TO PLUG.
     (a) If the commission finds that the well was not properly plugged, it shall order the operator to plug the well according to the rules of the commission in effect at the time the order is issued.
     (b) If the operator cannot be found or is no longer in existence or has no assets with which to properly plug the well, the commission shall order the nonoperators to plug the well according to the rules of the commission in effect at the time the order is issued.
     (c) Repealed by Acts 1983, 68th Leg., p. 5409, ch. 1002, § 3, eff. Aug. 29, 1983.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5409, ch. 1002, § 3, eff. Aug. 29, 1983.

§ 89.043. PLUGGING BY COMMISSION.
     (a) If the commission determines at a hearing under Section 89.041 of this code that a well has not been properly plugged or needs replugging, the commission, through its employees or through a person acting as agent for the commission, may plug or replug the well if:
          (1) the well was properly plugged according to rules in effect at the time the well was abandoned or ceased to be operated; or
          (2) neither the operator nor nonoperator properly plugged the well, and
               (A) neither the operator nor nonoperator can be found; or
               (B) neither the operator nor nonoperator has assets with which to properly plug the well.
     (b) If a well is leaking salt water, oil, or gas or is likely to leak salt water, oil, or gas, and the leakage will cause or is likely to cause a serious threat of pollution or injury to the public health, the commission, through its employees or agents, may direct the operator to take remedial action or to plug the well or may plug or replug the well without holding a hearing under Section 89.041 of this code or giving notice under Subsection (c) of this section.
     (c) Not later than the 30th day before the date the commission enters into a contract to plug a delinquent inactive well, the commission shall send a notice by certified mail to the operator of the well at the address last reported to the commission as required by Section 91.142 and commission rules. The notice shall direct the operator to plug the well and shall state that:
          (1) the commission may plug the well and foreclose its statutory lien under Section 89.083 unless the operator requests a hearing not later than the 10th day after the date the operator receives the notice;
          (2) if the commission forecloses its statutory lien under Section 89.083, all well-site equipment will be presumed to have been abandoned and the commission may dispose of the equipment and hydrocarbons from the well as provided by Section 89.085;
          (3) if the commission plugs the well, the commission:
               (A) by order may require the operator to reimburse the commission for the plugging costs; or
               (B) may request the attorney general to file suit against the operator to recover those costs;
          (4) the commission has a statutory lien on all well-site equipment under Section 89.083; and
          (5) the lien described by Subdivision (4) is foreclosed by operation of law if the commission does not receive a valid and timely request for a hearing before the 15th day after the date the notice is mailed.
     (d) The operator of a well made the subject of a prior commission final order directing that it be plugged is not entitled to a second hearing under this section.
     (e) The commission shall file for record a copy of the notice in the office of the county clerk of the county in which the well is located. The notice filed with the county need not be acknowledged. The copy of the notice filed in the office of the county clerk must contain the section, block, survey, and abstract number, when available to the commission, of the land on which the well is located. The clerk shall record the notice in the real property records of the county. The commission shall not be charged a fee for the filing or recording of the notice. The commission shall furnish a copy of the notice to a holder of a lien on the well or a nonoperator on that person's request. For purposes of title insurance policies issued under authority of Title 11, Insurance Code, this notice is not a notice of enforcement or violation of law, ordinance, or governmental regulation unless the notice contains a legally sufficient description of the specific land on which the well is located.
     (f) At the request of the commission, the attorney general may file suit to enforce an order issued by the commission under Subsection (c)(3)(A).

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, eff. Aug. 29, 1983; Acts 1993, 73rd Leg., ch. 515, § 2, eff. Jan. 1, 1994; Acts 1995, 74th Leg., ch. 928, § 1, eff. Aug. 28, 1995;

Acts 1999, 76th Leg., ch. 29, § 1, eff. Aug. 30, 1999; Acts 1999, 76th Leg., ch. 57, § 1, eff. May 10, 1999; Acts 2001, 77th Leg., ch. 1233, § 13, eff. Sept. 1, 2001; Acts 2005, 79th Leg., ch. 728, § 11.147, eff. Sept. 1, 2005.

§ 89.044. RIGHT TO ENTER ON LAND. Text of section effective until January 1, 2006
     The commission or its employees or agents, the operator or the nonoperator, on proper identification, may enter the land of another for the purpose of plugging or replugging a well that has not been properly plugged.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, eff. Aug. 29, 1983. For text of section effective January 1, 2006, see § 89.044, post

§ 89.044. RIGHT TO ENTER ON LAND. Text of section effective January 1, 2006
     (a) The commission or its employees or agents, the operator, or the nonoperator, on proper identification, may enter the land of another for the purpose of plugging or replugging a well that has not been properly plugged.
     (b) A prospective operator who has been authorized under Section 89.047 to conduct a surface inspection of a well, on proper identification, may enter the land of another for the sole purpose of conducting the inspection.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, eff. Aug. 29, 1983; Acts 2005, 79th Leg., ch. 267, § 3, eff. Jan. 1, 2006. For text of section effective until January 1, 2006, see § 89.044, ante

§ 89.045. LIABILITY FOR DAMAGES.
     The commission and its employees and agents, the operator, and the nonoperator are not liable for any damages that may occur as a result of acts done or omitted to be done by them or each of them in a good-faith effort to carry out this chapter.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, eff. Aug. 29, 1983.

§ 89.046. PENALTIES AND OTHER RELIEF.
     The plugging or replugging of a well by the commission does not prevent the commission from seeking penalties or other relief provided by law from any person who is required by law, rules adopted by the commission, or a valid order of the commission to plug the well.

Added by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 1, 1983.

§ 89.047. ORPHANED WELL REDUCTION PROGRAM. Text of section effective January 1, 2006
     (a) In this section:
          (1) "Depth of the well" means the vertical depth of a well as measured in linear feet from the surface to the lowest perforation of the casing of the well that is within the commission-designated correlative interval for the field for which the well is issued a permit.
          (2) "Operator in good standing" means an operator who:
               (A) has a commission-approved organization report;
               (B) is the designated operator of at least one well within the jurisdiction of the commission;
               (C) has filed with the commission under Section 91.104 a bond, letter of credit, or cash deposit in an amount sufficient to qualify to operate one or more additional wells; and
               (D) is not the subject of a commission or court order regarding a violation of a commission rule with which the operator has not complied or a complaint that has been docketed by the commission alleging a violation of a commission rule.
          (3) "Orphaned well" means a well:
               (A) for which the commission has issued a permit;
               (B) for which production of oil or gas or another activity under the jurisdiction of the commission has not been reported to the commission for the preceding 12 months; and
               (C) whose operator's commission-approved organization report has lapsed.
          (4) "Producing well" means a well classified by the commission as an oil or gas well in accordance with commission rules.
          (5) "Service well" means a well for which the commission has issued a permit that is not a producing well. The term includes an injection, disposal, or brine mining well.
     (b) A person who is considering assumption of operatorship and regulatory responsibility for an orphaned well may nominate the well under consideration by filing a request on a form prescribed by the commission notifying the commission that the person seeks authority to conduct a surface inspection of the well to determine whether the person desires to be designated by the commission as the operator of the well.
     (c) If the person is an operator in good standing and the well is not already subject to a nomination, the commission shall accept the nomination and issue a written confirmation to the person of the person's authority to conduct a surface inspection of the nominated well for a stated period not to exceed 30 days.
     (d) A person to whom a confirmation is issued under Subsection (c) may conduct a surface inspection of the well. The person must deliver written notice to the owner of record of the surface estate and any occupant of the tract on which the well is located at least three days before the date of the inspection. The notice must:
          (1) identify the orphaned well;
          (2) state the name, address, and telephone number of the person;
          (3) state the date the person intends to conduct the surface inspection;
          (4) state the name of at least one representative of the person who will participate in the surface inspection; and
          (5) state that the person intends to inspect the orphaned well in accordance with this section for the purpose of assessing the current status and viability of the well.
     (e) In conducting a surface inspection of the orphaned well, the person may visually inspect the well and all related equipment, tanks, and other facilities and may conduct noninvasive testing such as using a gauge to determine the pressure present at the wellhead but may not produce oil or gas from the well, reenter the well, pull tubing from or perform any other type of downhole work on the well, conduct a salvage operation on the well, or remove any tangible item from the well site.
     (f) The commission shall designate the person as the operator of the well if the person files with the commission:
          (1) a factually supported claim based on a recognized legal theory to a continuing possessory right in the mineral estate accessed by the well, such as evidence of a current oil and gas lease or a recorded deed conveying a fee interest in the mineral estate;
          (2) a completed certificate of compliance; and
          (3) a nonrefundable fee in the amount of $250.
     (g) A fee collected under Subsection (f) shall be deposited to the credit of the general revenue fund and may be appropriated only to the commission to be used to enforce the laws and rules concerning oil and gas conservation and waste and pollution prevention.
     (h) A person who is designated as the operator of an orphaned well on or after January 1, 2006, and not later than December 31, 2007, is entitled to receive:
          (1) a nontransferable exemption from severance taxes for all future production from the well as provided by Section 202.060, Tax Code;
          (2) a nontransferable exemption from the fees provided by Sections 81.116 and 81.117 for all future production from the well; and
          (3) a payment from the commission in an amount equal to the depth of the well multiplied by 50 cents for each foot of well depth if, not later than the third anniversary of the date the commission designates the person as the operator of the well, the person brings the well back into continuous active operation or plugs the well in accordance with commission rules.
     (i) A well is considered to be in continuous active operation for purposes of Subsection (h)(3) if:
          (1) the well is a producing well and the well has produced at least 10 barrels of oil or 100 mcf of gas per month for at least three consecutive months as shown in the records of the commission and as authorized by a permit issued by the commission; or
          (2) the well is a service well and the well has been used for the disposal or injection of oil and gas wastes or another purpose related to the production of oil or gas for at least three consecutive months as shown in the records of the commission and as authorized by a permit issued by the commission.
     (j) The commission shall make payments to operators under Subsection (h)(3) annually in the same order the commission determines the operators to be entitled to the payments. The aggregate amount of payments in a state fiscal year under that subsection may not exceed $500,000. An operator may not receive:
          (1) more than one payment under that subsection for the same well; or
          (2) cumulative payments in an amount that exceeds the amount of the bond, letter of credit, or cash deposit the operator has filed with the commission under Section 91.104.

Added by Acts 2005, 79th Leg., ch. 267, § 4, eff. Jan. 1, 2006.

§ 89.048. PLUGGING OF WELL BY SURFACE ESTATE OWNER. Text of section effective January 1, 2006
     (a) In this section, "orphaned well" has the meaning assigned by Section 89.047.
     (b) The owner of an interest in the surface estate of a tract of land on which an orphaned well is located may contract with a commission-approved well plugger to plug the well.
     (c) If the surface estate owner enters into a contract under Subsection (b), the well plugger shall:
          (1) not later than the 30th day before the date the well is plugged, mail notice of its intent to plug the well to the operator of the well at the operator's address as shown by the records of the commission;
          (2) assume responsibility for the physical operation and control of the well as shown by a form the person files with the commission and the commission approves;
          (3) file a bond, letter of credit, or cash deposit covering the well as required by Section 91.107; and
          (4) plug the well in accordance with commission rules.
     (d) On successful plugging of the well by the well plugger, the surface estate owner may submit documentation to the commission of the cost of the well-plugging operation. The commission shall reimburse the surface estate owner from money in the oil-field cleanup fund in an amount not to exceed 50 percent of the lesser of:
          (1) the documented well-plugging costs; or
          (2) the average cost incurred by the commission in the preceding 24 months in plugging similar wells located in the same general area.
     (e) The commission shall adopt any rules reasonably necessary to implement this section.

Added by Acts 2005, 79th Leg., ch. 267, § 4, eff. Jan. 1, 2006.