§ 52-29. Production levels of gas wells - Rulemaking - Hardship wells - Field rules.

A.  Every corporation, joint stock company, limited copartnership, partnership or other person now or hereafter claiming or exercising the right to produce natural gas within the limits of this state, as owner, lessee, licensee, or by virtue of any other right or claim is hereby prohibited from producing from any gas well an amount in excess of that prescribed by the Oklahoma Corporation Commission.

B.  Except as otherwise provided in this section, the Corporation Commission shall have the power and authority to promulgate production rules from time to time for all natural gas wells producing within this state, or for such categories of natural gas wells producing within this state as the Commission may deem appropriate, establishing levels of production upon a finding that the levels of production so established will be sufficient to prevent waste as the same is defined in Section 86.3 of this title and will protect the interests of the public against production of the natural gas reserves underlying this state in amounts in excess of the reasonable market demand therefor.

C.  For thirty (30) months from the date of first production, a discovery gas well, as defined in this subsection, subject to the provisions of this section, shall have a production allowable which shall be the greater of one thousand three hundred (1,300) MCFD or sixty-five percent (65%) of the absolute open flow (AOF) as specified by the Corporation Commission.  Such discovery well allowable shall not be available for any discovery gas well wherein two (2) or more separate common sources of supply are commingled and one (1) common source of supply would not qualify a new gas well as a discovery gas well, as defined in this section.

Drilling and spacing units which are downspaced after June 1, 1997, shall not qualify for the discovery gas well allowable.

For purposes of this subsection, "discovery gas well" shall mean a new gas well, which is not an off-pattern well, which is the first well completed in a common source of supply within a drilling and spacing unit and is at least one (1) mile from all existing gas wells which are completed in the same common source of supply.  In the absence of spacing, a discovery well shall be the first well in the governmental section completed in a common source of supply, provided that the discovery gas well shall not be drilled closer than one thousand three hundred twenty (1,320) feet from the boundaries of the governmental section and is at least one (1) mile from all existing gas wells which are completed in the same common source of supply.

Allowables shall not apply, regardless of unit size, in the instance of production of gas by reservoir dewatering to extract said gas from reservoirs having initial water saturations at or above fifty percent (50%).

D.  The authority granted to the Corporation Commission by this section is in addition to that provided for in Section 239 of this title.

E.  The Corporation Commission may, for good cause shown under the exigencies of a particular case and after appropriate notice and hearing, establish a production level different from the levels provided by this section or established by rule promulgated by the Corporation Commission.

F.  Production rules promulgated by the Corporation Commission pursuant to the authority granted in subsection B of this section shall be promulgated pursuant to Article I of the Administrative Procedures Act, Sections 250.3 through 308.2 of Title 75 of the Oklahoma Statutes, including the provisions contained therein prescribing the required notice and hearing for rulemaking.

G.  The provisions of subsection A of this section and production rules promulgated by the Corporation Commission pursuant to subsection B of this section shall not supersede or invalidate the provisions of any rule or order of the Corporation Commission establishing production levels for natural gas from a well which has been expressly authorized by Corporation Commission order to produce at a specified rate applicable only to that well where the basis for the rate established is based upon a determination by the Corporation Commission that reasonable cause exists to expect that production below the rate would damage the well and cause waste, a so-called "hardship well", or establishing field rules under Section 239 of this title governing the taking of gas from a specified common source of supply or field.

Added by Laws 1913, c. 99, p. 171, § 9, emerg. eff. March 26, 1913.  Amended by Laws 1981, c. 22, § 1, eff. Oct. 1, 1981; Laws 1992, c. 14, § 2, eff. April 1, 1992; Laws 1997, c. 390, § 1, eff. July 1, 1997; Laws 2007, c. 331, § 1, emerg. eff. June 4, 2007.