15A NCAC 05D .0111. LIMITATION OF PRODUCTION AND ALLOCATION

(a)  The department has the authority to limit production for the purpose of prevention of waste, both above and below ground, and the protection of correlative rights.  The department reserves the right upon public hearing, held by the director, to determine the amount of oil which can be produced without waste from each designated pool.  The director shall consider the following factors:

(1)           productive capacities,

(2)           effective pay thicknesses,

(3)           permeability and porosity,

(4)           type of drive mechanism,

(5)           size and content of reservoir,

(6)           bottom hole pressures,

(7)           gas‑oil ratios,

(8)           water‑oil ratios.

(b)  Operators shall maintain a record of decline of production and of pressure for each well.  The pressure decline may be based either on bottom hole pressure tests or on shut in pressure tests which should be run every 120 days.

(c)  The department has the authority to limit production, set allowables and allocate allowables, whenever the total amount of oil and/or gas which all of the pools in the state can produce, exceeds the amount reasonably required to meet market demand.  Such proration and allocation will be done only after a public hearing is held by the director.

 

History Note:        Authority G.S. 113‑391;

Eff. February 1, 1976;

Amended Eff. October 1, 1984.