Texas Natural Resources Code 89.085 – Possession and Sale of Equipment to Cover Plugging Costs
(a) When the commission forecloses its lien under § 89.083 on a delinquent inactive well, well-site equipment and any amount of hydrocarbons from the well that is stored on the lease are presumed to have been abandoned and may be disposed of by the commission in a commercially reasonable manner by either or both of the following methods:
(1) entering into a plugging contract that provides that the person plugging or cleaning up pollution, or both, will take title to well-site equipment, hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation in exchange for a sum of money deducted as a credit from the contract price; or
(2) selling the well-site equipment, hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation at a public auction or a public or private sale.
(b) The commission shall assign separate costs to:
(1) removing well-site equipment;
(2) plugging the well; and
(3) transporting, storing, and disposing of the well-site equipment.
Terms Used In Texas Natural Resources Code 89.085
- Contract: A legal written agreement that becomes binding when signed.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
(c) The commission shall dispose of well-site equipment or hydrocarbons under this section at a price or value that reflects the generally recognized market value of the equipment or hydrocarbons, with allowances for physical condition.
(d) The commission shall deposit money received from the sale of well-site equipment or hydrocarbons under this section to the credit of the oil and gas regulation and cleanup fund. The commission shall separately account for money and credit received for each well.
(e) A person who acquires well-site equipment or hydrocarbons under this section by sale or contract receives a clear title, free of all prior legal or equitable claims of whatever nature, whether perfected or inchoate.
(f) Not later than the 30th day after the date well-site equipment or hydrocarbons are disposed of under this section, the commission shall mail a notice by first class mail to the operator of the well at the address last reported to the commission as required by § 91.142 of this code and commission rules and, on request, to any lienholder or nonoperator.
(g) The notice required by Subsection (f) of this section must include:
(1) the lease name;
(2) the well number;
(3) the county in which the well is located;
(4) the abstract number of the property on which the lease is situated;
(5) the commission lease or gas well identification number or drilling permit number;
(6) a list of the property disposed of under this section; and
(7) a statement that any person who has a legal or equitable ownership or security interest in the equipment or hydrocarbons that was in existence on the date the commission foreclosed its statutory lien may file a claim with the commission.
(h) Not later than the 180th day after the date the well-site equipment or hydrocarbons are disposed of under this section, the commission shall publish a notice that states:
(1) the lease name;
(2) the well number;
(3) the county in which the well is located;
(4) the commission lease or gas well identification number or drilling permit number; and
(5) that equipment or hydrocarbons if applicable from the well and lease were disposed of under this section and that any person who has a legal or equitable ownership or security interest in the equipment or hydrocarbons that was in existence on the date the commission foreclosed its statutory lien may file a claim with the commission.
(i) The commission shall publish the notice required under Subsection (h) of this section in a newspaper of general circulation in the county in which the lease is located. A single notice may contain the information required for more than one well and lease. A notice given under this section following the plugging of a well may be combined with a notice given under § 91.115 of this code following the cleanup of a site or facility.