SECTION 3.45. Oil Allowables

(a) Oil allowable yardsticks.

(1) 1947 allowable yardstick. The following schedule allowable shall be assigned all wells according to depth of the reservoir and proration unit size authorized by the commission upon expiration of the discovery allowable, if discovery of the field occurred prior to January 1, 1965, provided that paragraph (3) of this subsection does not apply.

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(2) 1965 allowable yardstick. The following schedule allowable shall be assigned all wells according to depth of the reservoir and proration unit size authorized by the commission upon expiration of the discovery allowable, if discovery of the field occurred on or after January 1, 1965.

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(3) Exception. Wells in fields discovered prior to January 1, 1965, whose discovery allowables either have expired or will expire subsequent to July 1, 1964, upon expiration of the discovery allowable, may be assigned allowable pursuant to the 1965 yardstick, if such allowables exceed those which would be assigned pursuant to the 1947 yardstick, or if the proration unit size authorized by the commission is not provided for in the 1947 yardstick. It is provided that any adjustment made in allowable assignment pursuant to this paragraph shall not be made prior to the effective date of this order. Retroactive adjustment shall not be allowed.

(4) Texas offshore allowable yardstick.

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(5) The maximum daily allowable for a horizontal drainhole oil well or an oil well in a designated unconventional fracture treated (UFT) field is set forth in §3.86(d)(4) and (5) of this title (relating to Horizontal Drainhole Wells).

(b) Assignment of allowables for wells under statewide rules.

(1) All wells completed in fields operating under statewide rules which were assigned the 20-acre yardstick allowable prior to the adoption of the new spacing rule on October 1, 1962, will be continued at the same allowable rate unless, after notice and hearing, special rules or other special orders are adopted that would provide for a higher producing rate. Any new well completed in such a reservoir will be given the same allowable rate as is assigned the other wells even though it has been drilled as a regular location under the new statewide spacing rule and density rule.

(2) All wells completed in fields operating under statewide rules that are presently on discovery status or have had discovery status terminated subsequent to the adoption of the new state spacing rule on October 1, 1962, will be given the 40-acre yardstick allowable, until such time as a change is ordered by the commission.

(c) Production of marginal wells.

(1) To artificially curtail the production of any "marginal well" below the marginal limit prior to its ultimate plugging and abandonment is hereby declared to be waste, and no rule or order of the Railroad Commission of Texas, or other constituted legal authority shall be entered requiring restriction of the production of any "marginal well" as defined in this chapter.

(2) Application of paragraph (1) of this subsection shall be confined to unrestricted operating conditions which accord with established operating rules of the commission, and shall be subject to all operating conditions designed to prevent waste imposed by the commission, which conditions apply to all wells alike. (Reference Order Number 20-54,115, effective January 1, 1965.)

Source Note: The provisions of this §3.45 adopted to be effective January 1, 1976; amended to be effective March 10, 1986, 11 TexReg 901; amended to be effective February 1, 2016, 41 TexReg 785