Mississippi Code Title 75. Regulation of Trade, Commerce and Investments § 75-58-7

(a) “Board” shall mean the State Oil and Gas Board as created by Section 53-1-5 et seq., Mississippi Code of 1972.

(b) “Person” shall mean any individual, corporation, partnership, association, or any state, municipality, political subdivision of any state, or any agency department, or instrumentality of the United States, or any other entity, or any officer, agent, or employee of any of the above.

(c) “Oil” shall mean crude petroleum oil and all other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas.

(d) “Gas” shall mean all natural gas, whether hydrocarbon or nonhydrocarbon or any combination or mixture thereof, including hydrocarbons, hydrogen sulphide, helium, carbon-dioxide, nitrogen, hydrogen, casinghead gas, occluded natural gas from coal seams, and all other hydrocarbons not defined as oil in Section 75-58-7(c) above. For the purposes of this chapter only, the term gas shall not include gas which is consumed in operations on a well or which is vented or lost.

(e) “Operator” is defined as the party designated by the Board as the operator of the well.

(f) “Non-operator” shall mean an owner, as defined by Section 53-1-3, Mississippi Code of 1972, who is not designated as the operator.

(g) “Consenting non-operator” is defined as a non-operator who has affirmatively elected to have the operator market such non-operator's share of gas or is deemed to have consented to have the operator market such non-operator's share of gas.

(h) “Nonconsenting non-operator” is defined as a non-operator who has affirmatively elected to market his share of gas and not have the operator market his share of gas.

(i) “Net proceeds” is defined as the total amount of money received from the sale of gas, less (i) costs incident to marketing and transportation of gas incurred by the operator to third parties and (ii) severance, privilege, maintenance or other taxes measured on or by production.

(j) “Direct cost” is defined as a cost actually incurred by the operator in the marketing of gas from a well.

(k) “Balancing party” shall include operators and non-operators as defined in this chapter as well as other interest owners who have exercised a right to take production in kind.

(l) “Underproduction” shall mean the volumetric amount by which the volume of gas taken by a balancing party in any month is less than such party's entitlement for such month.

(m) “Overproduction” shall mean the volumetric amount by which the volume of gas taken by a balancing party in any month is greater than such party's entitlement for such month.

(n) “Cumulative underproduction” shall mean the total underproduction attributable to a balancing party, as adjusted so as to reflect any cash balancing as provided by Section 75-58-13(c), and any makeup gas taken for volumetric balancing.

(o) “Cumulative overproduction” shall mean the total overproduction attributable to a balancing party, as adjusted so as to reflect any cash balancing as provided by Section 75-58-13(c), and any makeup gas taken for volumetric balancing.

(p) “Underproduced party” shall mean a balancing party credited with cumulative underproduction.

(q) “Overproduced party” shall mean a balancing party charged with cumulative overproduction.

(r) “Makeup gas” shall mean the volume of gas an underproduced party is entitled to take for volumetric balancing, in addition to its entitlement.

(s) “Entitlement” shall mean a balancing party's percentage interest in the well multiplied by the well's actual production of gas.

(t) “Long-term contract” is a gas purchase agreement which contractually commits gas for a term greater than one year from the date of initial deliveries of gas thereunder;

(u) “Short-term contract” is a gas purchase agreement other than a long-term contract;

(v) “Qualifying long-term contract” is an offer by a buyer of gas to enter into a long-term contract with consenting non-operators which contains the same (i) pricing conditions, (ii) buyer purchase obligations and (iii) expiration date as the long-term contract executed by the operator.