Ala. Admin. Code r. 400-2-5-.09

Current through Register Vol. 43, No. 1, October 31, 2024

Section 400-2-5-.09 - Permissible Tolerance In Production Volumes Allowed For Oil Wells

(1) Daily Tolerance. It is recognized that oil wells located on units capable of producing their daily allowable may overproduce one day and under produce another. No unit, except for the purpose of testing in the process of completing or recompleting a well and for tests made for the purpose of obtaining scientific data, shall produce during any day more than one hundred twenty-five percent (125%) of the daily allowable assigned the unit, or ten (10) barrels above the daily unit allowable, whichever is greater. Subject to the foregoing, any underproduction may be made up by production from the same unit within the same month and overproduction shall be adjusted by underproduction.

(2)Monthly Tolerance. No unit shall produce in any one (1) month more than its monthly allowable plus a tolerance equal to three (3) days' allowable production. The allowed monthly tolerance of overproduction shall be adjusted during the following month by underproduction. Overproduction within the permitted tolerance shall be considered as oil produced against the allowable assigned to the unit for the following month.

(3) Production in Excess of Monthly Allowable Plus Tolerance. In instances where production in excess of the monthly allowable plus tolerance occurs from error, mechanical failure, testing, or other cause reasonably beyond the control of the operator, a report of such excess production shall be filed in writing with the Board and the transporter within fifteen (15) days after occurrence. Such report shall contain the number of barrels of excess production and the plan of adjustment. Such excess production shall be considered as oil produced against the allowable assigned to the unit for the following month and such may be transported from the tanks only as the unit accrues daily allowable to offset such excess production.

(4)General. The tolerance permitted on a daily or monthly basis shall not be construed to increase the allowable of a production unit or to grant authority to any operator to market or to any transporter to transport any quantity of oil in excess of the unit's allowable. The possession of a quantity of oil in storage at the end of any month in excess of three (3) days' allowable plus any untransported allowable oil shall be construed as a violation of this rule unless reported as provided in (3) above.

Ala. Admin. Code r. 400-2-5-.09

New Rule: Filed April 11, 2000; effective May 16, 2000. Amended: Filed July 6, 2010; effective August 10, 2010.

Author: Marvin Rogers

Statutory Authority:Code of Ala. 1975, §§ 9-17-1, etseq.