Current through Reg. 49, No. 12; March 22, 2024
(a) General
prohibition. Oil or gas shall not be produced from different strata through the
same string of tubulars except as provided in this section. As used in this
section, "different strata" means two or more different commission-designated
fields, or one or more commission-designated fields and any other hydrocarbon
reservoir.
(b) Exception. After
notice and an opportunity for a hearing, the commission or its delegate may
grant an exception to subsection (a) of this section to permit production from
a well or wells commingling oil or gas or oil and gas from different strata, if
commingled production will prevent waste or promote conservation or protect
correlative rights.
(c) Notice of
Application for Exception.
(1) Timing of
Notice.
(A) The applicant shall give notice
of each request for an exception by serving a copy of the application to
commingle production on all affected operators at the same time the application
is filed with the commission.
(B)
Service shall be accomplished by delivering a copy of the application to the
operator to be served, or to the operator's duly authorized representative, in
person, by agent, by courier receipted delivery, by first class mail to the
operator's mailing address as shown on the operator's most recently filed Form
P-5 (Organization Report) or the most recently filed letter notification of
change of address, or by such other manner as the commission may
direct.
(2) Operators
Presumptively Affected By Application.
(A) An
initial exception to commingle production exclusively from different
commission-designated fields is presumed to affect all operators in each of the
commission-designated fields proposed to be produced through the same string of
tubulars.
(B) An initial exception
to commingle production from a commission-designated field with production from
one or more hydrocarbon reservoirs that have not been designated by the
commission as a field is presumed to affect all operators in each of the
different commission-designated fields proposed to be produced through the same
string of tubulars and all operators of adjacent tracts, and of tracts nearer
to the well for which a commingling exception is sought than the longest
applicable minimum lease-line distance.
(C) An exception to commingle production
exclusively from the same commission-designated fields for which an initial
commingling application has previously been granted is presumed to affect all
operators of adjacent tracts, and of tracts nearer to the well for which a
subsequent commingling exception is sought than the longest applicable minimum
lease-line distance, who have a well completed in one or more of the
commission-designated fields for which commingling is sought.
(D) An exception to commingle production from
a commission-designated field and one or more hydrocarbon reservoirs in
specified correlative intervals that have not been designated by the commission
as fields, for which an initial commingling exception involving the same fields
and hydrocarbon reservoirs has previously been granted, is presumed to affect
all operators of adjacent tracts, and of tracts nearer to the well for which a
commingling exception is sought than the longest applicable minimum lease-line
distance.
(3) Notice
Required Only to Affected Operators.
(A)
Except as provided in subparagraph (B) of this paragraph, all operators
described in paragraph (2)(A)-(D) of this subsection are affected by a
requested exception to allow commingling and the applicant shall give each of
them notice of the application as provided in paragraph (1)(A) of this
subsection.
(B) The commission or
its delegate may determine that an operator described in paragraph (2)(A)-(D)
will be unaffected by a requested exception to allow commingling. This
determination shall be made only upon the applicant's written request and
provision to the commission of competent geological or engineering data
establishing conclusively that commingling production as requested by the
applicant will not physically interfere with the production of hydrocarbons by
the operator for which an unaffected determination is requested. An applicant
for an exception to allow commingling is not required to give notice of the
application to an operator who has been determined to be unaffected as provided
in this subparagraph.
(d) Commingled production. Commingled
production of gas from different strata pursuant to subsection (b) of this
section shall be considered production from a common source of supply for
purposes of proration and allocation.