CHAPTER XI. OIL AND GASCHAPTER XI. OIL AND GAS\ARTICLE 1. DRILLING AND OPERATIONS

ARTICLE 1. DRILLING AND OPERATIONS

All oil and gas wells hereafter commenced or drilled within the city limits of the city shall be drilled as nearly as practicable in the center of a 10 acre square geographical location. The governing body of the city, at the time of the granting of the license hereinafter provided for, may permit such variations as may be deemed necessary in the amount of acreage required, and the location of the drill site, depending upon geographical factors, the location of houses and other buildings, and the area available which might be attributed to the proposed well.

(Code 1973, 11-101)

It shall be unlawful for any person, firm or corporation to drill or commence operations for the drilling of a well for oil and gas purposes at any place within the city limits of the city, without first having obtained from the governing body of the city, a license or permit for the commencement of such operations, and for the drilling of such well. The applicant for the permit, shall, at the time of making application therefor, deposit with the city clerk a fee of $500 and in the event the permit is granted, the fee shall be retained by the city, but if the permit is denied, the fee shall be returned to the applicant.

(Code 1973, 11-102)

No such permit shall be granted by the governing body until the applicant therefor shall have submitted satisfactory evidence as follows:

(a)   The applicant has a valid oil and gas lease or leases, signed by the persons owning at least 51% of the territory in the area attributable to or which might be attributed to the location where it is proposed to drill the well, which lease shall contain a provision or shall be accompanied by an agreement in writing, providing for the pooling of all royalties and rentals arising from the leases or from production or the acreage to be distributed among all of the property owners in the area or territory attributable to the well or wells which may be drilled under the lease, which distribution shall be made to the respective property owners, including leasing property owners and nonleasing property owners, in accordance with the number of square feet owned by each property owner in the area or territory.

(b)   An agreement with the lessors and with the lessee or lessees giving to the city, the option to purchase all natural gas produced from the leasehold estate.

(c)   A map or plat of the area covered by the oil and gas lease, showing the proposed location of each well, together with the written consent of the owner of the land on which the well is proposed to be located, consenting to the drilling of the well on the land, which map or plat shall also show the location of all residences, buildings and other structures in the immediate vicinity of such proposed location.

(d)   A drilling agreement providing adequate protection to all persons who might be concerned with such drilling operations, including a reasonable and adequate plan for the handling of slush, base sediment and salt water that may be produced in connection with the drilling and operation of the well together with facilities for the handling of production to the end that it may not be necessary to store oil in any populated area, which agreement shall also provide that in the event the well is nonproductive, all tools, equipment and machinery used in connection with the drilling of the well shall be removed within 60 days thereafter, and the premises fully restored to their original condition as nearly as practicable.

(Code 1973, 11-103)

No such permit shall be granted by the governing body and no oil or gas well shall be drilled or operated within the city until the operator shall have filed with the city clerk of the city a certification of insurance insuring the operator against bodily injury to persons in an amount not less than $50,000 for each person and $100,000 for each accident and insuring the operator against damages to property in an amount not less than $50,000 for each accident and further insuring the operator against bodily injury from motor vehicle and trucking operations in an amount not less than $50,000 for each person and $100,000 for each accident and against property damage by reason of motor vehicle and trucking operations in an amount not less than $25,000 for each accident. Evidence of such insurance shall be kept on file with the city clerk of the city continuously so long as any such well or wells are being drilled or operated within the city.

(Code 1973, 11-104)

The governing body may from time to time and shall upon the application of any interested person, make a determination of the territory which is to be included in each drilling location within the limits of the city, which the determination shall follow the standard 10 acre geographical locations as nearly as practicable, but In making such determination the governing body shall not be required to split or divide any platted lot or lots; and the area or territory to be attributed to the well or wells under a particular lease or leases shall be the territory described in the drilling permit issued therefor.

(Code 1973, 11-105)

All producing oil or gas wells within the city shall be equipped with electric pumping equipment and the wells that are located in or near the populated areas of the city, shall have such pumping equipment enclosed or fenced with a substantial mesh wire fence or such other type of fence as may be approved by the governing body, sufficient to prevent persons who might be injured thereby from gaining access to such pumping equipment.

(Code 1973, 11-106)

It shall be unlawful to commence operations for the drilling of a well other than as provided for in this section, and it shall be unlawful for any person, firm, or corporation to commence operations for the drilling of a well or to conduct any such drilling operations within the city limits of the city, without first having obtained the license provided for in this article.

(Code 1973, 11-108)

It shall be unlawful for any person to place any tank or tank battery for the storage of oil in the city within 1,000 feet of a residence, or within 1,000 feet of any building or structure not owned by that person, or his or her employees or contractors.

(Code 1973, 11-109; Code 1983)

It shall be unlawful for any person to lay or maintain any pipe or pipelines for the transportation of oil or any other substance in the streets, alleys, or other public places of the city without having first obtained a franchise ordinance granting permission so to do. All such pipelines shall thereafter be laid, maintained, and operated in accordance with the terms of the franchise.

(Code 1973, 11-110)

At the time of the granting of any permit or license, under the provisions of this article, the governing body may make such additional requirements as it may deem necessary for the protection and safety of persons and property in the territory likely to be affected by the drilling of the well.

(Code 1973, 11-107)

Any person, firm or corporation hereafter drilling or commencing operations for the drilling of any oil or gas well in violation of the provisions of this article, or thereafter pumping or operating any well drilled in violation of this article, shall upon conviction thereof, be punished by a fine of not less than $100 nor more than $500, or by imprisonment for not more than six months or by both such fine and imprisonment, and each day’s violation of this article shall be deemed a separate offense.

(Code 1973, 11-112)