27-559. Development of water for use in operations; taking over well which yields fresh water

A. A lessee shall have the right to develop water for use in its operations subject to the applicable laws of the state pertaining to drilling water wells and using water produced therefrom.

B. If any well drilled for oil or gas on a lease issued pursuant to this article fails to develop oil or gas in paying quantities but develops fresh water, the department shall have the option to take over the well if the lessee determines to abandon it as an oil or gas well upon payment by the department to the lessee of the reasonable value of the well casing and other materials necessary to be left in the well, and the lessee shall thereupon be relieved of all further obligations with respect to the well, its completion and abandonment.