Drilling units.

(1) When two or more separately owned tracts of land are embraced within an established drilling unit, the owners thereof may validly agree to integrate their interest and to develop their lands as a drilling unit. Where, however, such owners have not agreed to integrate their interests, the division shall, for the prevention of waste and to avoid the risks involved in the drilling of unnecessary wells, require such owners to do so and to develop their lands as a drilling unit.

(2) Should the owners of separate tracts embraced within a drilling unit fail to agree upon the integration of the tracts and the drilling of a well on the unit, and should it be established that the division is without authority to require integration as provided for in subsection (1), then, subject to all other applicable provisions of this law, the owners of each tract embraced within the drilling unit may drill on their respective tracts; but the allowable production therefrom shall be such proportion of the allowable for the full drilling unit as the area of such separately owned tract bears to the full drilling unit.

(3) The department may allow a person who is an applicant for a drilling permit in areas lacking adequate governmental survey control to define a proposed drilling unit using latitude and longitude coordinates determined from global positioning satellites and instrument systems, if at least one permanent reference monument is installed within each proposed unit. In the event of a new field discovery, the latitude and longitude coordinates of the permanent monument shall be referenced to established governmental section corners which may exist within the field. Permanent monuments installed pursuant to this section shall be protected and maintained by the operator for the life of the field.