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                               * * * * *