Section 259.090

Title XVI CONSERVATION, RESOURCES AND DEVELOPMENT

Chapter 259

Effective - 28 Aug 1965   

  259.090.  Production — controls and allocations authorized. — The council shall determine market demand for each marketing district and shall regulate the amount of production as follows:

  (1)  The council shall limit the production of oil and gas within each marketing district to that amount which can be produced without waste, and which does not exceed the reasonable market demand.

  (2)  Whenever the council limits the total amount of oil or gas which may be produced in the state or a marketing district, the council shall allocate or distribute the allowable production among the pools therein on a reasonable basis, giving, where reasonable under the circumstances to each pool with small wells of settled production, an allowable production which prevents the general premature abandonment of such wells in the pool.

  (3)  Whenever the council limits the total amount of oil or gas which may be produced in any pool in this state to an amount less than that amount which the pool could produce if no restriction was imposed, regardless of whether or not the limitation is imposed in relation to the limitation on the total amount of oil or gas produced in the marketing district wherein the pool is located, the council shall allocate or distribute the allowable production among the several wells or producing properties in the pool on a reasonable basis, preventing or minimizing reasonable avoidable drainage, so that each property will have the opportunity to produce or to receive its just and equitable share, subject to the reasonable necessities for the prevention of waste.

  (4)  In allocating the market demand for gas as between pools within marketing districts, the council shall give due regard to the fact that gas produced from oil pools is to be regulated in a manner as will protect the reasonable use of its energy for oil production.

  (5)  The council shall not be required to determine the reasonable market demand applicable to any single pool, except in relation to all other pools within the same marketing district, and in relation to the demand applicable to the marketing district.  In allocating allowables to pools, the council may consider, but shall not be bound by, nominations of purchasers to purchase from particular fields, pools, or portions thereof.  The council shall allocate the total allowable for the state in such manner as prevents undue discrimination between marketing districts, fields, pools, or portions thereof resulting from selective buying or nomination by purchasers.

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(L. 1965 2d Ex. Sess. p. 917 § 9)