1. (a) Definitions. As used in this section:

   1. (1) “Commission” means the Oil and Gas Commission;
   2. (2) “Director” means the Director of Production and Conservation; and

   3. (3) “Well” as used in this section shall only mean wells that are:

      1. (A) Abandoned as defined in 15 CAR § 275-701(a)(1); or
      2. (B) Orphaned as defined in 15 CAR § 275-702(a)(2).

2. (b) When a transfer request is received, on a form prescribed by the Director of Production and Conservation, for a well, the following documentation must be submitted by the proposed new permit holder:

   1. (1) A signed new base lease properly recorded in the county where the well is located; or
   2. (2) An affidavit stating a new base lease has been obtained and properly recorded in the county where the well is located.

3. (c) Upon review and acceptance of the transfer request, and prior to approval of the transfer request, the proposed new permit holder shall:

   1. (1) Pay a salvage value for the downhole well equipment as follows:

      1. (A) Five hundred dollars ($500) per well for wells less than three thousand feet (3,000’) in depth; and
      2. (B) One thousand dollars ($1,000) per well for wells equal to or greater than three thousand feet (3,000’) in depth;
   2. (2) Pay a salvage value for the tanks, pumping units, and other related equipment, as determined by submission of two (2) independent salvage value estimates from commercial salvage oil and gas production equipment dealers and approved by the director or his or her designee;
   3. (3) Pay the fair market value per barrel, to be determined at the time of the transfer approval, for all oil fluids (hydrocarbons) stored on the lease or unit; and
   4. (4) If applicable, provide financial assurance in accordance with 15 CAR § 275-202 and file all other required organizational and registration forms.
4. (d) All payments shall be by cashier’s check or money order, payable to the Oil and Gas Commission, and shall be deposited in the Abandoned and Orphaned Well Plugging Fund.

5. (e)

   1. (1) The director has sole discretion to approve or deny requests for transfer of the well.
   2. (2) If, upon review of a transfer request for the well, the director determines that property rights, environmental or public safety and welfare concerns will be advanced through plugging the well, the transfer request may be denied.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Source: new rule April 13, 2008)"