(a) General prohibition. Oil or gas shall not be produced
from different strata through the same string of tubulars except as
provided in this section. As used in this section, "different strata"
means two or more different commission-designated fields, or one or
more commission-designated fields and any other hydrocarbon reservoir.
(b) Exception. After notice and an opportunity for
a hearing, the commission or its delegate may grant an exception to
subsection (a) of this section to permit production from a well or
wells commingling oil or gas or oil and gas from different strata,
if commingled production will prevent waste or promote conservation
or protect correlative rights.
(c) Notice of Application for Exception.
(1) Timing of Notice.
(A) The applicant shall give notice of each request
for an exception by serving a copy of the application to commingle
production on all affected operators at the same time the application
is filed with the commission.
(B) Service shall be accomplished by delivering a copy
of the application to the operator to be served, or to the operator's
duly authorized representative, in person, by agent, by courier receipted
delivery, by first class mail to the operator's mailing address as
shown on the operator's most recently filed Form P-5 (Organization
Report) or the most recently filed letter notification of change of
address, or by such other manner as the commission may direct.
(2) Operators Presumptively Affected By Application.
(A) An initial exception to commingle production exclusively
from different commission-designated fields is presumed to affect
all operators in each of the commission-designated fields proposed
to be produced through the same string of tubulars.
(B) An initial exception to commingle production from
a commission-designated field with production from one or more hydrocarbon
reservoirs that have not been designated by the commission as a field
is presumed to affect all operators in each of the different commission-designated
fields proposed to be produced through the same string of tubulars
and all operators of adjacent tracts, and of tracts nearer to the
well for which a commingling exception is sought than the longest
applicable minimum lease-line distance.
(C) An exception to commingle production exclusively
from the same commission-designated fields for which an initial commingling
application has previously been granted is presumed to affect all
operators of adjacent tracts, and of tracts nearer to the well for
which a subsequent commingling exception is sought than the longest
applicable minimum lease-line distance, who have a well completed
in one or more of the commission-designated fields for which commingling
is sought.
(D) An exception to commingle production from a commission-designated
field and one or more hydrocarbon reservoirs in specified correlative
intervals that have not been designated by the commission as fields,
for which an initial commingling exception involving the same fields
and hydrocarbon reservoirs has previously been granted, is presumed
to affect all operators of adjacent tracts, and of tracts nearer to
the well for which a commingling exception is sought than the longest
applicable minimum lease-line distance.
(3) Notice Required Only to Affected Operators.
(A) Except as provided in subparagraph (B) of this
paragraph, all operators described in paragraph (2)(A)-(D) of this
subsection are affected by a requested exception to allow commingling
and the applicant shall give each of them notice of the application
as provided in paragraph (1)(A) of this subsection.
(B) The commission or its delegate may determine that
an operator described in paragraph (2)(A)-(D) will be unaffected by
a requested exception to allow commingling. This determination shall
be made only upon the applicant's written request and provision to
the commission of competent geological or engineering data establishing
conclusively that commingling production as requested by the applicant
will not physically interfere with the production of hydrocarbons
by the operator for which an unaffected determination is requested.
An applicant for an exception to allow commingling is not required
to give notice of the application to an operator who has been determined
to be unaffected as provided in this subparagraph.
(d) Commingled production. Commingled production of
gas from different strata pursuant to subsection (b) of this section
shall be considered production from a common source of supply for
purposes of proration and allocation.
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Source Note: The provisions of this §3.10 adopted to be effective January 1, 1976; amended to be effective February 23, 1979, 4 TexReg 436; amended to be effective September 12, 1979, 4 TexReg 3082; amended to be effective May 14, 1996, 21 TexReg 3791 |