In an application for a compulsory pooling order made pursuant to SDCL 45-9-31, the applicant may request the board to provide for the recovery of risk compensation, in addition to actual prorated costs, from an owner who elects not to participate in the risk and cost of drilling and operating a well in an established spacing unit. Before an order is entered with such a provision, the applicant must:

1. (1) Provide proof that an unsuccessful, good-faith attempt was made to have the nonparticipating owner execute a lease or participate in the risk and cost of drilling and operating the well; and
2. (2) Notify the nonparticipating owner with proof of service that the applicant intends to request the board to provide for the recovery of risk compensation and that the nonparticipating owner may object to the risk compensation provision by responding in opposition to the application for the compulsory pooling order.

Source: 38 SDR 117, effective January 12, 2012.

General Authority: SDCL 45-9-11 , 45-9-13.

Law Implemented: SDCL 45-9-30 to 45-9-36 , inclusive.