La. Admin. Code tit. 43 § XIX-2103

Current through Register Vol. 50, No. 11, November 20, 2024

Section XIX-2103 - Order

A. The volume of natural gas permitted to be produced from all wells in Louisiana classified by the Department of Conservation as gas wells producing from non-associated gas pools (hereinafter referred to as "allowable"), shall be established in the manner hereinafter set forth and gas shall be produced from such wells in the manner herein prescribed.

1. Application

a. This order shall apply to all wells in Louisiana producing gas from nonassociated gas pools, whether covered by Special Order or not, and any provisions of prior orders, including Special Field Orders, conflict herewith are hereby modified to the extent of such conflict only.

b. This order shall not apply to casinghead gas produced from wells classified by the Department of Conservation as oil wells, nor to pools in which gas cycling or pressure maintenance projects have been covered by Special Orders.

c. Where a gas pool reaches a stage of depletion which would render the enforcement of this order impracticable or unduly burdensome either on the Department of Conservation or upon the producers, gathers or purchasers of gas from such pool, the Commissioner of Conservation may exempt such pool from the provisions of this order by notice to the producers and purchasers of gas from the pool who filed producers or transporters reports with the Department of Conservation for the month immediately prior thereto.

2. Nominations

a. On or before December 5, 1955, and on or before the fifth day of March, June, September and December of each year thereafter, each gas purchasing company, user, transporter, gathering system operator or other party receiving gas at the well or at a central delivery point shall file gas nominations in the form of affidavits, stating the volume of gas which will be purchased or withdrawn from each pool within a field during the next succeeding calendar quarter of the year. These nominations shall be filed, in duplicate, by the conservation district, with one copy to the commissioner and one copy to the appropriate district office. These nominations must conform to the actual volumes of gas which the nominator anticipates will be required to fulfill its requirements from the field during the succeeding calendar quarter of the year and shall be expressed on a daily average for the period. At the same time the nominator shall report to the commissioner the actual volume of gas purchased, used, or transported by it during the corresponding quarter of the previous calendar year and shall also be expressed on a daily average for the period.

3. Allowables

a. The commissioner may supplement such nominations and reports with gas market information otherwise available to him, and will then determine the reasonable market demand for gas to be produced during such next ensuing quarterly period from each pool. The total indicated requirements for a pool shall then be allocated among the wells within the pool in accordance with the formula adopted for such pool, by Special Order applicable to such pool, or, if no formula has been adopted for a pool by a Special Order, shall be apportioned among the producing wells in the pool in proportion to the productive area assigned to each well.

b. If any well or wells shall be incapable of producing the full allowable so determined, an allowable shall be fixed for each such well upon the basis of its ability to produce, and the aggregate allowables of such wells as so fixed shall be subtracted from the reservoir allowable, and the remainder of the allowable for the pool shall be allocated to the remaining wells upon the basis of the formula in effect.

c. The scheduled allowables for each well as issued by the Commissioner of Conservation for each quarterly period shall be expressed as an average daily allowable for the period. For the purpose of reporting monthly production to the commissioner, the daily allowable for each well times the number of days in the calendar month shall be reported as the monthly allowable.

d. No gas well shall be entitled to an allowable, nor shall an allowable be granted, until all necessary physical connections are made to permit full utilization of the allowable to be granted nor until a plat has been filed, in triplicate, with the Commissioner of Conservation showing the productive acreage attributable to said well, the location of all wells on the lease and immediately surrounding the lease producing from the reservoir and the ownership of said lease. Should the commissioner consider that any acreage assigned by an operator to a well for the computation of allowable production not to be productive, the commissioner may exclude such acreage which he considers nonproductive in computing the allowable production for the well, or may require the operator to file new plat of acreage assignable to the well all of which the commissioner considers to be productive.

e. Allowables for newly completed gas wells shall commence on the date of completion provided the well is physically connected to a market and provided a plat is on file. No productive acreage attributed to a well shall be attributed to any other drilling or producing well in the same pool. The allowable for a new well completed in a pool during any allowable period shall be established by the same formula as was used in fixing the allowable for wells already producing from that pool at the beginning of the allowable period.

f. The commissioner shall have the right, when emergencies arise, to issue such emergency allowables as become necessary in order to satisfy, for the period of the emergency, an increased demand for gas.

4. Balancing of Production to Allowable

a. Except as hereinafter prohibited, any gas well may produce during a calendar month twice the allowable assigned to it, provided that its production shall be brought into balance at the times and in the manner herein prescribed. When the monthly production from a well exceeds its monthly allowable, the excess shall be termed overproduction, and when a well's monthly production is less than its monthly allowable the deficiency shall be termed "underproduction."

b. Each producer shall keep a monthly account of the cumulative production status of each gas well as to overproduction and underproduction and shall report such cumulative production status on the R5P reports filed monthly with the Department of Conservation.

c. For the purpose of this order, on July 1, 1955, all gas wells shall be considered in balance and not credited with any underproduction or charged with any overproduction, but thereafter when any gas well shall have a cumulative overproduction status the last six months of any year, the operator or owner of such well shall reduce the production of gas from the well during the first six months of the following year below the regular allowables so as to bring its production in balance with its allowable by the first day of July of that year. Such reduced production may be at varying rates of withdrawal, normally experienced in gas production and marketing, so long as the overproduction is eliminated by the first day of July. Any well having a cumulated overproduction status on the first day of July of any year shall be closed in and not produced until such overproduction is entirely eliminated.

d. When any gas well shall have a cumulative underproduction status at the end of the last six months of any year, such underproduction may be made up during the first six months of the following year, but any underproduction remaining on the first day of July of any year shall be canceled and shall not thereafter be made up.

5. Capability of Wells to Produce

a. Anything herein contained to the contrary notwithstanding, no well shall be produced in excess of its maximum efficient rate of production nor at a monthly rate in excess of twice its monthly allowable, even during make-up periods.

b. Unless waived by the commissioner, each producer shall conduct semiannual deliverability tests of each producing gas well by methods approved by the commissioner; the results of such tests to be reported on Form DT-1 entitled Gas Well Deliverability Test. Conservation district managers may schedule test periods for each field in his district and notify all producers at least 10 days in advance of such field tests, and in that instance, such deliverability tests shall be made in accordance with the schedule. Where no such schedule is made in a conservation district, each producer may schedule such tests at his own convenience, but shall give the manager of the conservation district in which the well is to be tested notice at least 10 days in advance of the proposed test, in order that the district manager may have the test witnessed by a representative of the conservation department if he so desires.

c. When any well becomes incapable of producing its current allowable, or when the allowable assigned to a well exceeds an efficient producing rate or might result in injury to the well or reservoir, such matters shall be reported to the manager of the conservation district in which the well is located within five days after they become known to the producer, and the allowable for that well shall be reduced to its productive capacity or efficient rate, whichever is lower.

d. When any well shall cease to produce or be incapable of delivering gas into the line, the producer shall report that fact to the manager of the conservation district where the well is located.

6. Ratable Take

a. During the last six months of each year, the commissioner shall make a survey of the production of gas from fields having more than one market. Should the commissioner find that during the preceding six-month period, gas has not been taken ratably from the wells in any reservoir in accordance with the allowables established by him, he shall call a conference of all producers, purchasers and gatherers who are currently filing with the Department of Conservation reports of production, purchase or transportation of gas from the reservoir, and determine the reason why gas has not been taken in accordance with the allowables established by him and shall make such adjustments in allowables or take such further action as he may deem appropriate to accomplish a ratable taking of gas from the various wells in the reservoir.

La. Admin. Code tit. 43, § XIX-2103

Adopted by the Department of Conservation (November 8, 1955), amended (July 1, 1959).

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:4 et seq.