1-1 By: Haywood S.B. No. 1551
1-2 (In the Senate - Filed March 13, 1995; March 21, 1995, read
1-3 first time and referred to Committee on Natural Resources;
1-4 April 12, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 8, Nays 0; April 12, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1551 By: Haywood
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the repeal of certain limitations on the authority of
1-11 the Railroad Commission of Texas to regulate production from
1-12 multiple stratigraphic oil and gas reservoirs.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Subsection (b), Section 85.053, Natural Resources
1-15 Code, is amended to read as follows:
1-16 (b) When, as provided in Subsection (b) of Section 85.046 or
1-17 Subsection (b) of Section 86.012 of this code, as amended, the
1-18 commission has permitted production by commingling oil or gas or
1-19 oil and gas from multiple stratigraphic or lenticular accumulations
1-20 of oil or gas or oil and gas, the commission may distribute,
1-21 prorate, apportion, or allocate the production of such commingled
1-22 separate multiple stratigraphic or lenticular accumulations of oil
1-23 or gas or oil and gas as if they were a single pool; provided,
1-24 however, that:
1-25 (i) <the commingling and distribution, proration,
1-26 apportionment, or allocation of separate accumulations with
1-27 commission established discovery dates after January 1, 1940, and
1-28 prior to June 1, 1945, shall not serve to expand, add to, or extend
1-29 the vertical or areal extent of any single pool;>
1-30 <(ii)> such commingling shall not cause the allocation
1-31 of allowable production from a well producing from any separate
1-32 accumulation or accumulations to be less than that which would
1-33 result from the commission applying the provisions of Section
1-34 86.095 of this code to such accumulation or accumulations; and
1-35 (ii) <(iii)> the allocation of the allowable for such
1-36 commingled production shall be based on not less than two factors
1-37 which the Railroad Commission shall take into account as directed
1-38 by Section 86.089 of this code<; and>
1-39 <(iv) No gas well in any field falling within the
1-40 classification under Subdivision (i) above where commingled
1-41 separate accumulations of gas are being prorated under the
1-42 authority granted by this Subsection (b) shall be assigned an
1-43 allowable in excess of its production during the most recent
1-44 production period reported to the commission and in the absence of
1-45 any reported production the assigned allowable shall not exceed the
1-46 open-flow potential of such well as reported to the commission;
1-47 provided, however, that the commission may, if it finds special
1-48 conditions require such, make a greater assignment>.
1-49 SECTION 2. Subsection (d), Section 85.055, Natural Resources
1-50 Code, is amended to read as follows:
1-51 (d) When, as provided in Subsection (b) of Section 85.046 or
1-52 Subsection (b) of Section 86.012 of this code, as amended, the
1-53 commission has permitted production by commingling oil or gas or
1-54 oil and gas from multiple stratigraphic or lenticular accumulations
1-55 of oil or gas or oil and gas, the commission may allocate,
1-56 distribute, or apportion the production of such commingled separate
1-57 multiple stratigraphic or lenticular accumulations of oil or gas or
1-58 oil and gas as if they were a single common source of supply;
1-59 provided, however, that:
1-60 (i) <the commingling and distribution, proration,
1-61 apportionment, or allocation of separate accumulations with
1-62 commission established discovery dates after January 1, 1940, and
1-63 prior to June 1, 1945, shall not serve to expand, add to, or extend
1-64 the vertical or areal extent of any single common source of supply;>
1-65 <(ii)> such commingling shall not cause the allocation
1-66 of allowable production from a well producing from any separate
1-67 accumulation or accumulations to be less than that which would
1-68 result from the commission applying the provisions of Section
2-1 86.095 of this code to such accumulation or accumulations; and
2-2 (ii) <(iii)> the allocation of the allowable for such
2-3 commingled production shall be based on not less than two factors
2-4 which the Railroad Commission shall take into account as directed
2-5 by Section 86.089 of this code<; and>
2-6 <no gas well in any field falling within the classification under
2-7 (i) above where commingled separate accumulations of gas are being
2-8 prorated under the authority granted by this Subsection (d) shall
2-9 be assigned an allowable in excess of its production during the
2-10 most recent production period reported to the commission and in the
2-11 absence of any reported production the assigned allowable shall not
2-12 exceed the open-flow potential of such well as reported to the
2-13 commission; provided, however, that the commission may, if it finds
2-14 special conditions require such, make a greater assignment>.
2-15 SECTION 3. Subsection (b), Section 86.081, Natural Resources
2-16 Code, is amended to read as follows:
2-17 (b) When, as provided in Subsection (b) of Section 85.046 or
2-18 Subsection (b) of Section 86.012 of this code, as amended, the
2-19 commission has permitted production by commingling oil or gas or
2-20 oil and gas from multiple stratigraphic or lenticular accumulations
2-21 of oil or gas or oil and gas, the commission may prorate, allocate,
2-22 and regulate the production of such commingled, separate multiple
2-23 stratigraphic or lenticular accumulations of oil or gas or oil and
2-24 gas as if they were a single common reservoir; provided, however,
2-25 that:
2-26 (i) <the commingling and distribution, proration,
2-27 apportionment, or allocation of separate accumulations with
2-28 commission established discovery dates after January 1, 1940, and
2-29 prior to June 1, 1945, shall not serve to expand, add to, or extend
2-30 the vertical or areal extent of any single common reservoir;>
2-31 <(ii)> such commingling shall not cause the allocation
2-32 of allowable production from a well producing from any separate
2-33 accumulation or accumulations to be less than that which would
2-34 result from the commission applying the provisions of Section
2-35 86.095 of this code to such accumulation or accumulations; and
2-36 (ii) <(iii)> the allocation of the allowable for such
2-37 commingled production shall be based on not less than two factors
2-38 which the Railroad Commission shall take into account as directed
2-39 by Section 86.089 of this code<; and>
2-40 <no gas well in any field falling within the classification under
2-41 Subdivision (i) above where commingled separate accumulations of
2-42 gas are being prorated under the authority granted by this
2-43 Subsection (b) shall be assigned an allowable in excess of its
2-44 production during the most recent production period reported to the
2-45 commission and in the absence of any reported production the
2-46 assigned allowable shall not exceed the open-flow potential of such
2-47 well as reported to the commission; provided, however, that the
2-48 commission may, if it finds special conditions require such, make a
2-49 greater assignment>.
2-50 SECTION 4. The importance of this legislation and the
2-51 crowded condition of the calendars in both houses create an
2-52 emergency and an imperative public necessity that the
2-53 constitutional rule requiring bills to be read on three several
2-54 days in each house be suspended, and this rule is hereby suspended,
2-55 and that this Act take effect and be in force from and after its
2-56 passage, and it is so enacted.
2-57 * * * * *