Chapter V · Business Regulations

Article 3. Oil And Gas Wells

Sections 5-301 to 5-308 · 8 sections

5-301 License and permit fee.

It shall be unlawful for any person to drill or commence operations for the drilling of a well or wells for oil and gas production at any place within the city limits without first having obtained from the governing body of the city a license or permit for the commencement of such operations for the drilling of the well. The applicant for such permits shall, at the time of making application therefor, deposit with the city clerk a fee of $10 and in the event such permit is granted, the fee shall be retained by the city, but if such permit is denied the fee shall be returned to the applicant.

(Ord. 207, Sec. 1)

5-302 Application; evidence to be presented by licensee.

No permit for the drilling of an oil or gas well shall be granted by the governing body of the city until the applicant thereafter shall have submitted an application containing the following information and evidence thereof:

(a)That the applicant has a valid oil and gas lease or leases owned by the persons owning at least 51 percent of the territory embraced by the boundaries of the area comprising the drilling location where the well is to be drilled, which lease or leases, or from the production on the acreage contained in the drilling location, the royalties to be distributed among all the property owners in the area or territory embraced by the location, including leasing property owners as well as nonleasing property owners, in accordance with the number of square feet owned by each property owner in the area as related to the total number of square feet in the area. Any lease or leases, who own 49 percent or less of the acreage in a designated drilling location shall have the privilege of participating in the drilling of any well drilled upon the location, provided that such minority leaseholder or leaseholders, shall notify the leaseholders to whom a permit to drill upon the location has been granted that such minority leaseholder, or leaseholders, wish to participate in the drilling of the well; provided further, that such notice shall be given the leaseholder to whom such permit has been granted before the permittee has drilled to a depth of 500 feet; and in such event, such participating minority leaseholder, or leaseholders, shall pay their pro rata share of the expense of drilling, testing, equipping and operating the well in accordance with the percentage of the entire drilling location owned by the minority leaseholder, or leaseholders. An in such event, the leaseholder to whom a permit has been granted may demand from such minority leaseholders a bond, cash deposit, or other evidence of financial responsibility to insure payment of the proportionate share of the drilling, testing and other expenses by the minority leaseholders, or leaseholders. Any minority leaseholder, or leaseholders, owning leases on the drilling location, who has not participated as herein provided, shall not be permitted to share in the proceeds from the well.

(b)An agreement giving the city the option to purchase all nature gas produced from the leasehold estate at a rate not to exceed $.08 per 1,000 cubic feet.

(c)A map or plat of the area by the oil and gas lease or leases showing the proposed site of each well, and showing the location of all residences, buildings, and other structures in the immediate vicinity of such drilling site.

(d)A drilling agreement providing adequate protection to all persons who might be concerned with such drilling operations, including a reasonable and adequate plan for the handling and disposal of slush, base sediment, and salt water, that may be produced in the drilling and operation of the well, together with facilities for the handling of production to the end that it may not be necessary to store oil in any populated area; which the agreement shall also provide that _ in the event that the well is nonproductive of oil or gas in commercial quantities, all tools, equipment, and machinery used in connection with the drilling of the well shall be removed within 60 days after the completion thereof as a dry hole, and the premises fully restored to their original condition as nearly as practicable.

(Ord. 201; Sec. 2)

5-303 Acreage; spacing and locations.

All oil or gas wells hereafter commenced or drilled within the city limits shall be drilled on a location consisting of at least 10 acres, provided that the governing body of the city at the time of the granting of a license or a permit as hereinbefore provided, may permit such variations as may be deemed necessary in the amount of acreage required, the location of the drill site, and the shape of the location, depending upon geographical factors, upon the location of houses, and other buildings, and topographical features of the land embraced by the location.

(Ord. 207, Sec. 3)

5-304 Evidence of financial responsibility.

No permit for the drilling of an oil or gas well shall be granted by the governing body of the city for a well in or near a populated area or an area occupied by buildings or other structures until the applicant shall have supplied satisfactory evidence of adequate financial responsibility to respond and pay any damages resulting from the operation or drilling of the well or wells, and the governing body may, in its discretion, demand a good and sufficient surety bond conditional that the applicant will comply with the provisions of this article, and that he or she will protect the safety of persons and property in the vicinity of the well from damage and will pay such damages as are legally found to be the obligation of the licensee.

(Ord. 207, Sec. 4)

5-305 Governing body may make additional requirements.

At the time of the granting of any permit or license, or thereafter during drilling or production operations, under the provisions of this article, the governing body may make such additional requirements as it may deem necessary for the protection and safety of persons and property in the territory likely to be affected by the drilling or operation of the well or wells.

(Ord. 207, Sec. 5)

5-306 Machinery and slush pits to be fenced.

All producing oil or gas wells within the city limits which require the use of machinery or which have as an incident to the production thereof slush ponds or pits, shall be equipped with a substantial mesh wire fence enclosing such machinery and slush ponds or pits, which fence shall be construed in accordance with the standards prescribed by the governing body of the city or its agents. Salt water shall not be left standing in any pit or slush pond.

(Ord. 207, Sec. 6)

5-307 Type of machinery to be used.

The governing body shall have the right to prescribe for use by the operator of any producing well such a type and kind of machinery as will not create excessive noise, vibrations, and disturbance within the city limits of the city. Within the city limits, an electric motor is required.

(Ord. 207, Sec. 7; Code 1993)

5-308 Plugging wells.

Any individual, partnership, company, etc. that abandons and plugs a well within the city limits, shall set a bridge at least feet below the bottom of surface pipe, and fill the surface pipe to within six feet of the top of the surface pipe, cementing the surface pipe with a solid core of cement its entire length or depth.

(Ord. 210A)