Current through Reg. 49, No. 12; March 22, 2024
(a) Where oil and
gas are found in the same stratum and it is impossible to separate one from the
other, or when a well has been classified as a gas well and such gas well is
not connected to a cycling plant and such well is being produced on a lease and
the gas is utilized under Texas Natural Resources Code §§
RSA
86.181 -
RSA
86.185, the operator shall install a
separating device of approved type and sufficient capacity to separate the oil
and liquid hydrocarbons from the gas.
(1) A
separating device shall be kept in place as long as a necessity for it exists,
and its use shall not be discontinued without the consent of the
Commission.
(2) All oil and any
other liquid hydrocarbons as and when produced shall be adequately measured
pursuant to paragraphs (3) and (4) of this subsection before the same leaves
the lease from which they are produced, except for gas wells where the full
well stream is moved to a plant or central separation facility in accordance
with §
RSA
3.55 of this title (relating to Reports on
Gas Wells Commingling Liquid Hydrocarbons before Metering) (Statewide Rule 55)
and the full well stream is measured, with each completion being separately
measured, before the gas leaves the lease. If an operator commingles production
pursuant to subsection (b) of this section, the operator shall comply with
paragraphs (3) and (4) of this subsection but the operator is not required to
measure the production stream before it leaves the lease.
(3) Sufficient tankage and separator capacity
shall be provided by the producer to adequately take daily gauges of all oil
and any other liquid hydrocarbons unless LACT equipment, installed and operated
in accordance with the latest revision of American Petroleum Institute (API)
Manual of Petroleum Measurement Standards, Chapter 6.1 or another method
approved by the Commission or its delegate, is being used to effect custody
transfer.
(4) For Commission
purposes, the measurement requirements of this section are satisfied by the use
of coriolis or turbine meters or any other measurement device or technology
that conforms to standards established, as of the time of installation, by the
American Petroleum Institute (API) or the American Gas Association (AGA) for
measuring oil or gas, as applicable, or approved by the Director of the Oil and
Gas Division as an accurate measurement technology.
(b) Surface commingling of oil, gas, or oil
and gas production from two or more tracts of land producing from the same
Commission-designated reservoir or from one or more tracts of land producing
from different Commission-designated reservoirs is permitted and authorized if:
(1) the operator measures the production
stream from each tract and each Commission-designated reservoir separately
before combining it with a stream from another tract or Commission-designated
reservoir; or
(2) the tracts and
Commission-designated reservoirs have identical working interest and royalty
interest ownership in identical percentages.
(c) Production that complies with subsection
(b) of this section is authorized even if the separator, metering, or storage
is located off the tract or tracts. If production is surface commingled
pursuant to subsection (b) of this section, the operator shall file Form P-17A,
Application for Commingle Permit Pursuant to Rules 26 and/or 27.
(d) If an operator does not meet the
requirements of subsection (b) of this section, the Commission may approve
surface commingling of oil, gas, or oil and gas production from two or more
tracts of land producing from the same Commission-designated reservoir or from
one or more tracts of land producing from different Commission-designated
reservoirs in order to prevent waste, to promote conservation, or to protect
correlative rights.
(1) Administrative
approval. After receipt of a completed Form P-17, the Commission may grant
approval for surface commingling administratively when the tracts or
Commission-designated reservoirs do not have identical working interest and
royalty interest ownership in identical percentages and the Commission has not
received a protest to an application within 21 days of notice of the
application being mailed by the applicant to all working and royalty interest
owners or, if publication is required, within 21 days of the date of last
publication and the applicant provides:
(A) a
method of allocating production to ensure the protection of correlative rights,
in accordance with subsection (e) of this section; and
(B) an affidavit or other evidence that all
working interest and royalty interest owners have been notified of the
application by certified mail or have provided applicant with waivers of notice
requirements; or
(C) in the event
the applicant is unable, after due diligence, to provide notice by certified
mail to all working interest and royalty interest owners, a publisher's
affidavit or other evidence that the Commission's notice of application has
been published once a week for two consecutive weeks in a newspaper of general
circulation in the county or counties in which the tracts that are the subject
of the application are located.
(2) Request for hearing. When the tracts or
Commission-designated reservoirs do not have identical working interest and
royalty interest ownership in identical percentages and a person entitled to
notice of the application has filed a protest to the application with the
Commission, the applicant may request a hearing on the application. The
Commission shall give notice of the hearing to all working interest and royalty
interest owners. The Commission may permit the commingling if the applicant
demonstrates that the proposed commingling will protect the rights of all
interest owners in accordance with subsection (e) of this section and will
prevent waste, promote conservation or protect correlative rights.
(e) Reasonable allocation
required. The applicant must demonstrate to the Commission or its designee that
the proposed commingling of hydrocarbons will not harm the correlative rights
of the working or royalty interest owners of any of the wells to be commingled.
The method of allocation of production to individual interests must accurately
attribute to each interest its fair share of aggregated production.
(1) In the absence of contrary information,
such as indications of material fluctuations in the monthly production volume
of a well proposed for commingling, the Commission will presume that allocation
based on the daily production rate for each well as determined and reported to
the Commission by semi-annual well tests will accurately attribute to each
interest its fair share of production without harm to correlative rights. As
used in this section, "daily production rate" for a well means the 24 hour
production rate determined by the most recent well test conducted and reported
to the Commission in accordance with §§
RSA
3.28,
RSA
3.52,
RSA
3.53, and
RSA
3.55 of this title (relating to Potential and
Deliverability of Gas Wells to be Ascertained and Reported, Oil Well Allowable
Production, Annual Well Tests and Well Status Reports Required, and Reports on
Gas Wells Commingling Liquid Hydrocarbons before Metering).
(2) Operators may test commingled wells
annually after approval by the Commission or the Commission's delegate of the
operator's written request demonstrating that annual testing will not harm the
correlative rights of the working or royalty interest owners of the commingled
wells. Allocation of commingled production shall not be based on well tests
conducted less frequently than annually.
(3) Nothing in this section prohibits
allocations based on more frequent well tests than the semi-annual well test
set out in paragraph (1) of this subsection. Additional tests used for
allocation do not have to be filed with the Commission but must be available
for inspection at the request of the Commission, working interest owners or
royalty interest owners.
(4)
Allocations may be based on a method other than periodic well tests if the
Commission or its designee determines that the alternative allocation method
will insure a reasonable allocation of production as required by this
paragraph.
(f) An
operator that commingles production from different Commission-designated
reservoirs, whether under subsection (b) or (c) of this section, shall comply
with §
RSA
3.10 of this title (relating to Restriction
of Production of Oil and Gas from Different Strata).
(g) An operator that commingles production,
whether under subsection (b) or (c) of this section, shall review and correct
any forms related to its commingle permit as necessary in order to maintain
accurate information on file with the Commission.
(h) If oil or any other liquid hydrocarbon is
produced from a lease or other property covered by the coastal or inland waters
of the state, the liquid produced may, at the option of the operator, be
measured on a shore or at a point removed from the lease or other property on
which it is produced.
(i) Oil
gravity tests and reports (Reference Order Number 20-55, 647, effective 4-1-66,
and Reference Order Number 20-58, 528, effective 5-10-68.)
(1) Where individual lease oil production, or
authorized commingled oil production, separator, treating, and/or storage
vessels, other than conventional emulsion breaking treaters, are connected to a
gas gathering system so that heat or vacuum may be applied prior to oil
measurement for Commission-required production reports, the operator may, at
the operator's option, apply heat or vacuum to the oil only to the extent the
average gravity of the stock tank oil will not be reduced below a limiting
gravity for each lease as established by an average oil gravity test conducted
under the following conditions (Reference Order Number 20-55, 647, effective
4-1-66):
(A) the separator or separator
system, which shall include any type vessel that is used to separate
hydrocarbons, shall be operated at not less than atmospheric
pressure;
(B) no heat shall be
applied;
(C) the test interval
shall be for a minimum of 24 hours, and the average oil gravity after
weathering for not more than 24 hours shall then become the limiting gravity
factor for applying heat or vacuum to unmeasured oil on the tested
lease.
(2) Initial
gravity tests shall be made by the operator when such separator, treating,
and/or storage vessels are first used pursuant to this section. Subsequent
tests shall be made at the request of either the Commission or any interested
party; and such subsequent tests shall be witnessed by the requesting party.
Any interested party may witness the tests.
(3) Each operator shall enter on the required
production report the gravity of the oil delivered to market from the lease
reported, and it is provided that should a volume of oil delivered to market
from such lease separation facilities not meet the gravity requirement
established by the described test, adjustment shall be made by charging the
allowable of the lease on the relationship of the volume and the gravity of the
particular crude.
(4) Where a
conventional heater treater is required and is used only to break oil from an
emulsion prior to oil measurement, this section will not be applicable;
provided, however, that by this limitation on the section, it is not intended
that excessive heat may be used in conventional heater treater, and in
circumstances where such heater treater is connected to a gas gathering system
and it is found by Commission investigation made on its own volition or on
complaint of any interested party that excessive heat is used, either the
provisions of this section or special restrictive regulation may be made
applicable.
