(2) The board shall make rules and orders as necessary to administer the following provisions:

1. (a) Ownership of all facilities for the production, storage, treatment, transportation, refining, or processing of oil and gas shall be identified.

2. (b) Well logs, directional surveys, and reports on well location, drilling, and production shall be made and filed with the division. Logs of wells marked "confidential" shall be kept confidential for one year after the date on which the log is required to be filed, unless the operator gives written permission to release the log at an earlier date. Production reports shall be:

   1. (i) filed monthly;
   2. (ii) accurate; and
   3. (iii) in a form that reasonably serves the needs of state agencies and private fee owners.
3. (c) Monthly reports from gas processing plants shall be filed with the division.

4. (d) Wells shall be drilled, cased, cemented, operated, and plugged in such manner as to prevent:

   1. (i) the escape of oil, gas, or water out of the reservoir in which they are found into another formation;
   2. (ii) the detrimental intrusion of water into an oil or gas reservoir;
   3. (iii) the pollution of fresh water supplies by oil, gas, or salt water;
   4. (iv) blowouts;
   5. (v) cavings;
   6. (vi) seepages;
   7. (vii) fires; and

   8. (viii) unreasonable:

      1. (A) loss of a surface land owner's crops on surface land;
      2. (B) loss of value of existing improvements owned by a surface land owner on surface land; and
      3. (C) permanent damage to surface land.
5. (e) The drilling of wells may not commence without an adequate and approved supply of water as required by Title 73, Chapter 3, Appropriation. This Subsection (2)(e) is not intended to impose additional legal requirements, but to assure that existing legal requirements concerning the use of water have been met before the commencement of drilling.

6. (f) Subject to Subsection (9), an operator shall furnish a reasonable performance bond or other good and sufficient surety, conditioned for the performance of the duty to:

   1. (i) plug each dry or abandoned well;
   2. (ii) repair each well causing waste or pollution;
   3. (iii) maintain and restore the well site; and

   4. (iv) except as provided in Subsection (8), protect a surface land owner against unreasonable:

      1. (A) loss of a surface land owner's crops on surface land;
      2. (B) loss of value of existing improvements owned by a surface land owner on surface land; and
      3. (C) permanent damage to surface land.
7. (g) Production from wells shall be separated into oil and gas and measured by means and upon standards that are prescribed by the board and reflect current industry standards.
8. (h) Crude oil obtained from any reserve pit, disposal pond or pit, or similar facility, and any accumulation of nonmerchantable waste crude oil shall be treated and processed, as prescribed by the board.
9. (i) Any person who produces, sells, purchases, acquires, stores, transports, refines, or processes oil or gas or injects fluids for cycling, pressure maintenance, secondary or enhanced recovery, or salt water disposal in this state shall maintain complete and accurate records of the quantities produced, sold, purchased, acquired, stored, transported, refined, processed, or injected for a period of at least six years. The records shall be available for examination by the board or the board's agents at any reasonable time. Rules enacted to administer this Subsection (2)(i) shall be consistent with applicable federal requirements.
10. (j) Any person with an interest in a lease shall be notified when all or part of that interest in the lease is sold or transferred.
11. (k) The assessment and collection of administrative penalties is consistent with Section 40-6-11.

(3) The board has the authority to regulate:

1. (a) all operations for and related to the production of oil or gas including:

   1. (i) drilling, testing, equipping, completing, operating, producing, and plugging of wells; and
   2. (ii) reclamation of sites;
2. (b) the spacing and location of wells;

3. (c) operations to increase ultimate recovery, such as:

   1. (i) cycling of gas;
   2. (ii) the maintenance of pressure; and
   3. (iii) the introduction of gas, water, or other substances into a reservoir;
4. (d) the disposal of salt water and oil-field wastes;
5. (e) the underground and surface storage of oil, gas, or products; and
6. (f) the flaring of gas from an oil well.

(4) For the purposes of administering this chapter, the board may designate:

1. (a) wells as:

   1. (i) oil wells; or
   2. (ii) gas wells; and

2. (b) pools as:

   1. (i) oil pools; or
   2. (ii) gas pools.

(5) The board has exclusive jurisdiction over:

1. (a) class II injection wells, as defined by the federal Environmental Protection Agency or a successor agency; and
2. (b) pits and ponds in relation to these injection wells.

(6) The board has jurisdiction:

1. (a) to hear questions regarding multiple mineral development conflicts with oil and gas operations if there:

   1. (i) is potential injury to other mineral deposits on the same lands; or
   2. (ii) are simultaneous or concurrent operations conducted by other mineral owners or lessees affecting the same lands; and
2. (b) to enter the board's order or rule with respect to those questions.

(8) Subsection (2)(f)(iv) does not apply if the surface land owner is a party to, or a successor of a party to:

1. (a) a lease of the underlying privately owned oil and gas;
2. (b) a surface use agreement applicable to the surface land owner's surface land; or
3. (c) a contract, waiver, or release addressing an owner's or operator's use of the surface land owner's surface land.

(9)

1. (a) The board shall review rules made under Subsection (2)(f) to determine whether the rules provide adequate fiscal security for the fiscal risks to the state related to oil and gas operations.
2. (b) During the board's review under this Subsection (9), the board may consider the bonding schemes of other states.