Texas § NR.86.090 - AUTHORIZING OVERPRODUCTION AND UNDERPRODUCTION

§ NR.86.090. AUTHORIZING OVERPRODUCTION AND UNDERPRODUCTION

AUTHORIZING OVERPRODUCTION AND UNDERPRODUCTION. (a) In order to adjust the correlative rights and opportunities of each owner to produce, use, and sell gas from a common reservoir from which a portion of the market demand is seasonal or where a portion of the market demand fluctuates from month to month, the commission may permit the wells in the reservoir to be produced in excess of the monthly allowable, in accordance with the conditions and limitations set forth in Subsections (b), (c), (d), and (e) of this section, if no waste would be caused by such production. (b) Except as authorized in Subsection (e) of this section, no well may be permitted in any one month to produce in excess of two times its monthly allowable, except if there exists or there is threatened a situation causing an increase in the demand for the gas from the reservoir which cannot be satisfied otherwise from the reservoir, then the commission may allow a well to be produced in excess of two times its monthly allowable. (c) Except as authorized in Subsection (e) of this section, no well may ever be allowed to produce in excess of twice its allowable for more than two months in any period of six months beginning on the first day of March and September of each year. If a well has produced twice its allowable or more during a period of six months beginning on the first day of March or September, it shall be shut in or, by appropriate commission order, have its production restricted to a fractional part of its monthly allowable until its production and allowable are in balance. (d) On the first day of March and September of each year, the commission shall restrict production from all wells that are then overproduced to the fractional part of their monthly allowable that will bring the accumulated allowables and the accumulated monthly production in balance during the next six months. If the overproduction is not balanced during that six-month period, the overproduced well shall be shut in or, by appropriate commission order, have its production restricted to a fractional part of its monthly allowable until its production and allowable are in balance. (e) The commission by appropriate order may permit a gas well to be underproduced for a period of six consecutive months and may allow the accumulated underproduction to be produced in addition to the regular monthly allowable during the following six-month period. If the underproduction is not balanced during this six-month period, the remaining accumulated underproduction may, by appropriate commission order, be produced in addition to the regular monthly allowable during subsequent consecutive six-month periods. Acts 1977, 65th Leg., p. 2535, ch. 871, art. I, Sec. 1, eff. Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 745, Sec. 1, eff. June 14, 1985.