The bill amends various sections of the Iowa Code concerning oil and gas production, introducing new definitions such as "casing," "correlative rights," "exploratory well," and "well log" to enhance regulatory clarity. It requires individuals and businesses involved in oil and gas activities to file specific information with the Department of Natural Resources by April 1 each year, including business names and organizational plans. The bill also allows for variances to departmental rules under certain conditions and establishes guidelines for protecting confidential information submitted by owners. Additionally, it modifies existing pooling orders to integrate fractional tracts and outlines terms for cost recovery and risk penalties against nonconsenting owners.

Moreover, the bill introduces new filing requirements for applicants seeking cost recovery or risk penalties, mandating detailed information about nonconsenting owners and justifications for penalties during hearings. It allows the director of the Department of Natural Resources to issue variances without a hearing if the applicant shows a good faith effort to comply. The bill repeals Section 458A.6, which previously allowed the department to regulate production amounts based on market demand, and instead establishes new procedures for pooling orders that ensure nonconsenting owners receive a cost-free royalty interest during drilling. After the recovery of specified costs, these owners can choose to participate as working interest owners or continue receiving the default royalty. Overall, the bill aims to streamline regulatory processes while protecting the rights of nonconsenting owners in oil and gas operations.

Statutes affected:
Introduced: 458A.2, 458A.4, 458A.7, 458A.8, 458A.6