ARSD 74:12:10:04. Risk compensation in a compulsory unitization order

In an application for a compulsory unitization order made pursuant to SDCL 45-9-37, the applicant may request the board to provide for the recovery of risk compensation, in addition to actual prorated unit expenses, from owners who elect to have their share of unit expenses carried or otherwise financed. Before an order is entered with such a provision, the applicant must: (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 unit operations; and (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 unitization order.