BILL ANALYSIS


                                                        S.B. 1356
                                                      By: Haywood
                                                Natural Resources
                                                         04-10-95
                                     Committee Report (Unamended)
BACKGROUND

Downhole commingling is a production method used by operators to
reduce expenses and increase total recovery from wells. 
Commingling extends the productive life of wells and leases and
results in more taxes and revenue from the property.  This practice
reduces the economic abandonment of wells due to economic reasons.

Current law authorizes the approval of downhole applications after
notice has been given to others and a hearing has taken place.

PURPOSE

As proposed, S.B. 1356 authorizes the Railroad Commission of Texas
to permit production by commingling oil or gas, or both, after
notice and opportunity for hearing.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 85.046(b), Natural Resources Code, to
authorize the Railroad Commission of Texas to permit production by
commingling oil or gas or both from multiple stratigraphic or
lenticular accumulations where the commission, after notice and
opportunity for hearing, has found that producing gas or oil, or
both, in a commingled state will prevent waste, promote
conservation, or protect correlative rights.

SECTION 2. Amends Section 86.012(b), Natural Resources Code, to
make a conforming change.

SECTION 9. Effective date: September 1, 1995.

SECTION 10.    Emergency clause.