§209. State Mineral and Energy Board, authority of

In order to carry out the provisions of R.S. 30:208, the State Mineral and Energy Board may:

(1) Conduct geological and geophysical surveys of any kind, or cause them to be conducted on its behalf under contracts granting exclusivity of operations to the contracted party, and further providing for acquisition of seismic data by the state.

(2) Equip, drill, and operate wells or mines for the production of minerals. If a party is found to be equipping, drilling, or operating wells or mines for the production of minerals and the office of mineral resources finds that it is in the best interest of the state, the office may allow that party to continue such activity under the oversight of the office. Further, the office may collect from that party, after deduction of reasonable costs of drilling, equipping, and operating wells, the value of production from those wells. Revenues collected under the provisions of this Paragraph shall be credited to the Mineral and Energy Operation Fund in the state treasury.

(3) Construct, operate, and maintain necessary or convenient facilities for saving, transporting, and marketing mineral production.

(4)(a) Enter into operating agreements whereby the state receives a share of revenues from the production of oil, gas, and other minerals after deduction of costs, in whole or in part, such as for drilling, testing, completion, equipping, or operating a well or wells, as may be agreed upon by the parties, and assumes all or a portion of the risk cost of development or production activity in those situations where the board determines it is in the best interest of the state, either in equity or in developmental productivity to do so, such as, but not limited to the following illustrations:

(i) Taking over an abandoned well with appropriate land area in an attempt to reestablish production rather than plug and abandon the well.

(ii) Reestablishing a reasonable prospective productive area around a well already drilled wherein the lease was lost through an oversight or technicality.

(iii) Establishing a contract on unleased state acreage within an established unit.

(iv) Establishing a contractual agreement on acreage where title is disputed and production from the disputed acreage is being settled.

(b) The office of mineral resources, on behalf of the mineral board, shall administer all operating agreements. After deposit of all production payments to the Bond Security and Redemption Fund, an amount equal to twenty-five percent of the production payments from any operating agreement entered into after August 15, 1997, shall be credited to the Mineral and Energy Operation Fund for appropriation to the Department of Natural Resources.

(c) Any costs for which the state is held liable shall be paid only from revenues received by the state through production payments.

(d) Those operating agreements entered into by the State Mineral and Energy Board prior to August 15, 1997, are hereby ratified as being in compliance herewith.

(e) Upon a two-thirds vote of the members of the State Mineral and Energy Board and after a public hearing conducted in the affected parish pursuant to R.S. 30:6, enter into operating agreements whereby the state receives a share of revenues from the storage of oil, natural gas, liquid or liquefied hydrocarbons, or carbon dioxide, in whole or in part, as may be agreed upon by the parties, and assumes all or a portion of the risk of the cost of the activity in those situations where the board determines it is in the best interest of the state either in equity or in the promotion of conservation to do so, such as but not limited to the following illustrations:

(i) Creating caverns in salt domes for the storage of hydrocarbons or carbon dioxide.

(ii) Establishing a hydrocarbon or carbon dioxide storage facility in an underground reservoir.

(iii) Taking over an abandoned surface or underground storage facility in order to maximize the useful life of the existing facility.

(iv) Establishing a contractual agreement for the operation of a carbon dioxide storage facility for the storage and distribution of carbon dioxide for secondary or tertiary recovery operations.

(v) Establishing a contractual agreement on unleased acreage or where title is disputed to promote utilization of the state's resources for storage.

(5) Do all other things which may appear to be necessary or desirable.

Acts 1997, No. 530, §1; Acts 2002, 1st Ex. Sess., No. 106, §1, eff. April 18, 2002; Acts 2003, No. 993, §1, eff. July 2, 2003; Acts 2008, No. 610, §1; Acts 2009, No. 196, §2, eff. July 1, 2009.