Current through Reg. 50, No. 13; March 28, 2025
(a)
The daily allowable production of any lease or property shall not include
production based upon the daily potential production of the field or area in
which such well is located unless such well is actually on production, and such
lease or property shall share in the total allowable production of the field or
area, only to the extent of such well's actual ability to produce from day to
day regardless of the rated potential production thereof according to the
commission schedules.
(b)
Production of a well in any one day shall not exceed 110% of the top well
allowable as fixed by applicable rules and orders. Production and runs from a
lease during the monthly allowable period shall not exceed 105% of the monthly
allowable for the well or wells on the lease. However, the volume of oil that
is produced and removed from the producing property as tolerance production
shall be treated as overproduction and overruns shall be made up during the
next succeeding month.
(c) All oil
allowable volumes shall be measured in a manner consistent with §
3.71 of this title (relating to
Pipeline Tariffs) (Statewide Rule 71).
(d) A newly completed well coming into
production during a proration period will be gauged either by a commission
agent, or pipeline gauger if a commission agent is not available, if an offset
lease owner witnesses the gauge taken by the pipeline gauger. The allowable
production of such newly completed well shall be in addition to the existing
total allowable production of the field as previously ascertained. The well
whose allowable is thus fixed shall take its ratable share of production at the
next succeeding schedule date according to rule.
(e) All oil produced from any well governed
by any proration order of the commission shall be charged against the allowable
daily production of such well regardless of the disposition which is made of
the oil so produced.
(f) The
operator of any lease or unitized area in the State of Texas may be permitted
to produce the total allowable for any such lease or unitized area subject to
the following provisions:
(1) The operator
must submit an application to produce that total allowable on a lease or unit
production basis to the commission with a plat showing the subject lease or
unit as well as the adjacent properties thereto. Such plat shall identify
properly all properties and wells. The applicant shall give written notice to
all operators in the field when application is made for permission to produce
on a lease basis in a field. If no protest is received by the commission within
15 days of the date of mailing, the application may be granted by
administrative action. If protest is received, notice will be given and the
matter set for hearing.
(2) The
total daily allowable of the lease or unit shall be initially established as an
allowable equal to the sum of the current allowables for all wells on the lease
or unit. The allowable credited to any new or existing well may be increased to
the top well allowable permitted by subsequently filing a new potential test on
that well. The maximum total daily allowable of the lease or unit will be equal
to the sum of the scheduled top allowables assignable to each well for its
proration unit.
(3) The total daily
allowable of the lease or unit may be produced in any quantity from any well or
combination of wells with the exception that wells nearer than a regular
location from a lease or unit line shall not be permitted to produce more than
their normal allowables and wells at a distance of a regular location from a
lease or unit line shall not be produced at a rate of more that two times the
top allowable for such well unless waivers of objection to rates in excess of
this limit have been obtained from the operators of wells offsetting the
well.
(4) Annual well test or
allocation:
(A) An annual well test, or an
allocation pursuant to §
3.53(a)(2) of
this title (relating to Annual Well Tests and Well Status Reports Required)
shall be made and reported on the oil well status report form on each lease or
unit property to which a lease production basis has been granted showing an
individual well test or allocation on each oil well on the property made during
the prescribed test period determined by the commission. Annual well tests may
be witnessed by offset operators. An offset operator that desires to witness an
annual well test shall give the testing operator written notice of its desire
to witness the next scheduled annual well test of a specific well. A testing
operator that has received prior written notice that an offset operator desires
to witness an annual well test shall give that offset operator at least 24
hours advance notice of the date of the next annual well test for that well.
The Commission will use the test or allocation data in the preparation of the
oil proration schedule. The total schedule daily lease allowable shall be the
sum of the individual well allowables as determined under applicable rules and
the lease production basis shall be designated on the oil proration schedule by
an appropriate symbol. All wells on the lease for which an allowable is
requested shall have their production volumes reported pursuant to
§3.53(a).
(B) Any producing
well with a gas-oil ratio in excess of that permitted by the applicable rules
shall have its daily allowable calculated by dividing the producing gas-oil
ratio into the daily gas limit of the well.
(5) The Commission shall continue to require
special tests in cases of commingled production where individual lease
apportionment is determined by this method. Other special tests may be required
as the Commission deems necessary.
(6) In the event that the monthly gas
production of the lease or unit exceeds the permissible monthly lease gas
limit, the volume of gas in excess of the lease gas limit shall be considered
overproduction and must be made up by underproduction of the lease gas limit.
Whenever the overproduced amount equals the next month's lease gas limit the
overproduced amount shall immediately be reduced to zero by shutting in the
lease or by other means acceptable to the Commission.
(7) The East Texas Field is excluded from the
provisions of this section.
(g) Administrative cancelation of
overproduction.
(1) An operator may request
in writing to the Commission that overproduction for a specific lease be
canceled. The request shall include a listing of the names and addresses of all
offsetting operators in the same field as the lease for which the request is
filed.
(2) Upon receipt of an
operator's written request:
(A) Commission
staff shall determine whether the operator's wells on the specified lease are
in compliance with Commission rules excluding rules pertaining to
overproduction.
(B) If the wells
are found to be in compliance, the Commission staff shall send written notice
to offset operators as identified in the request advising them of the request
and giving them not less than 15 days to file a written objection to the
request.
(C) If no objection to the
request is received, the overproduction on the lease requested by the operator
shall be canceled.
(D) If objection
to the request is received or if Commission staff determines that the
operator's wells are not in compliance with Commission rules excluding rules
pertaining to overproduction, then the requested cancelation shall not be
administratively approved. The operator may request that the matter be
scheduled for public hearing pursuant to Tex. Nat. Res. Code §
86.090. The
burden of proof shall be on the applicant operator.
