16 Tex. Admin. Code § 3.48 - Capacity Oil Allowables for Secondary or Tertiary Recovery Projects
(a) Definitions.
The following words and terms, when used in this section, shall have the
following meanings, unless the context clearly indicates otherwise.
(1) Capacity oil allowable--The allowable
assigned from time to time by the director of the Oil and Gas Division or the
director's delegate to an oil lease or unit engaged in a secondary or tertiary
recovery program, that is consistent with the ability of the lease or unit to
produce and that will prevent the occurrence of overproduced status for the
lease or unit. Capacity oil allowables encompass and supercede what the
Railroad Commission formerly designated as waterflood allowables.
(2) Offsetting operators and unleased mineral
interest owners affected by the application--All offsetting operators and
unleased mineral interest owners to the lease or unit except for those
offsetting operators and unleased mineral owners the director of the Oil and
Gas Division or the director's delegate determines to be unaffected by the
application.
(b)
Application. The director of the Oil and Gas Division or the director's
delegate may grant a capacity oil allowable for a lease or unit, to the
operator of a secondary or tertiary recovery project, when evidence of
production increase in response to the secondary or tertiary recovery project
is noted. The operator's application for a capacity oil allowable shall consist
of:
(1) a written request that shall contain
a statement indicating that all offsetting operators and unleased mineral
interest owners affected by the application have been sent a copy of the
complete application, and a list of such offsetting operators and unleased
mineral interest owners indicating the date that notification was
sent;
(2) evidence of the
operator's participation in the subject secondary or tertiary recovery
project;
(3) a plat indicating all
producing wells and injection wells on the lease or unit and all offsetting
operators and unleased mineral interest owners to the lease or unit;
(4) if available, signed waivers of objection
from all offsetting operators and unleased mineral interest owners affected by
the application; and
(5) a
production graph illustrating both increased production and volumes of water or
other substances used in the secondary or tertiary recovery project that have
been injected on the lease or unit since initiation of the secondary or
tertiary recovery project.
(c) Notice and hearing. If the operator does
not submit signed waivers of objection from all offsetting operators and
unleased mineral interest owners affected by the application, there shall be a
minimum of 21 days notice of the application for a capacity oil allowable;
provided that, if the operator requests a hearing to consider the application,
such hearing shall be held only after at least 10 days notice. If the director
of the Oil and Gas Division or the director's delegate declines to approve the
initial application, or if a protest is received by the Oil and Gas Division
within the prescribed notice period, the operator may request a hearing to show
that the capacity oil allowable is necessary either to prevent waste or to
protect correlative rights. Any hearing held pursuant to this section shall be
held only after at least 10 days notice. If the operator submits signed waivers
of objection from all offsetting operators and unleased mineral interest owners
affected by the application, or if no protest is received by the Oil and Gas
Division within the 21-day notice period, or if no protestant appears at a
hearing to consider an application for a capacity oil allowable, the capacity
oil allowable may be granted administratively by the director of the Oil and
Gas Division or the director's delegate if the application establishes that the
capacity oil allowable is necessary to ensure maximum recovery from the
secondary or tertiary recovery project.
(d) Temporary basis. A capacity oil allowable
may be granted on a temporary basis by the director of the Oil and Gas Division
or the director's delegate upon receipt of a complete application indicating
that an immediate allowable increase is necessary to ensure maximum recovery
from the secondary or tertiary recovery project. If a hearing is held to
consider the application, any capacity oil allowable previously granted on a
temporary basis under this section will remain in effect until a signed order
of the Railroad Commission is issued in the matter. If the commission order
denies the application, or if an applicant fails to request a hearing to
consider a protested application, additional production resulting from the
capacity oil allowable granted on a temporary basis will be treated as
overproduction.
Notes
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