RATE OF OIL AND GAS PRODUCTION

RATE OF OIL AND GAS PRODUCTION. A. Oil: The daily oil allowable per drilling unit, as determined by the Board, must be produced on a monthly basis from the well to which said allowable is allocated, and in the event the well does not have the capacity to produce its total allowable, then it may produce such amount of oil less than its allowable that it is able to produce. No oil well shall produce during any 24-hour period more than twice its daily allowable except during prescribed testing periods. In recognition of the difficulty of producing the allowable to the exact number of barrels, the allowable production may be exceeded for any month by an amount equal to not more than three (3) days' allowable production, provided that the cumulative amount of such excess production shall not exceed three (3) days' current allowable production at the end of any month. B. Gas: The Mississippi State Oil and Gas Board shall set the maximum allowable gas withdrawal rates from each gas-producing pool. The allocation of allowables to all wells in a non-associated gas pool will be determined from the maximum efficient rate of production from such pool as established by the State Oil and Gas Board, after notice and hearing, whether called by order of this Board or upon petition filed by any interested party. It is the intent and purpose of this rule to permit each and every gas pool in the state to be produced up to its maximum efficient rate of production, subject to the prohibition of waste and the protection of the co-equal and correlative rights of the owners of a common source of supply. Semi-annual gas deliverability tests will be made by the operator of each gas well as required by Statewide Rule 41. Opportunity to witness the deliverability tests must be given to the State Oil and Gas Board by filing written notice with the Board at least five (5) days in advance of the testing. The results of these tests shall be furnished the Board on Form No. 4-A on or before February 20 and on or before August 20 of each year. Semi-annual gas allowables will be established for each gas well each March and September taking into consideration (1) the rate at which each gas pool can be efficiently produced as determined from deliverability tests, and (2) all other facts that are pertinent for the purpose of preventing waste and protecting correlative rights of owners. No well shall produce at a rate higher than its maximum efficient rate. Allowables less than the maximum deliverability may be assigned by the State Oil and Gas Board. An operator completing a new gas well or placing an old well on production after recompletion, rework, or stimulation shall test the well and file the results of such test with the Board on Form No. 4-A and obtain a temporary allowable prior to producing said well for any purpose other than the well test. The well will be assigned a new allowable on the next gas allowable schedule. The daily gas allowable allocated to a gas producing unit may not be transferred to another gas producing unit. In the event the well does not have the capacity to produce its total allowable, then it may produce such amount of gas less than its allowable that it is able to produce. In addition to the allowable assigned each gas well in each pool in the field, it shall be permitted to produce that quantity of gas necessary for use as fuel and light in lease operations in the field. Any gas well whose cumulative production status is below the cumulative allowable for such well in any pool on the last day of March of any year, as shown by the Production Status Report prepared during the month of May covering production through the month of March of each year, shall have the next ensuing six (6) months, beginning April 1 of each year, in which to produce such cumulated underproduction in addition to its regular monthly allowables. At the end of such six (6) months' makeup period, any cumulative underproduction which has not been made up shall be cancelled. In making up such underproduction, no well shall be produced at a rate in excess of the amount shown on the latest deliverability test filed with the Board for said well, or produced in such manner that waste is occasioned thereby or that may be detrimental to the well or the pool or field as a whole. In like manner, any gas well whose cumulative production status is in excess of the cumulative allowables for such well on the last day of March of any year, as shown by the Production Status Report prepared during the month of May covering production through the month of March of each year, shall cut its production for the next ensuing six (6) months, beginning April 1 of each year, below the regular monthly allowables so as to bring its production in balance with its allowables at the end of such makeup period. If, however, such overproduction is not made up by the end of such makeup period, effective December 1 of each year, the well shall be closed in until all overproduction is in balance with the allowed production. When a well's overproduction or underproduction equals three (3) times its current monthly allowable, the Board may, after notice and hearing, take such action as it deems necessary and proper to protect the co-equal and correlative rights of producers and owners in the field. Upon proper showing of emergency contemplated in and provided by Section 53-1-23, Mississippi Code of 1972, the Board may, without notice and hearing, by entry of appropriate emergency order, increase, decrease, suspend, or eliminate the allowable assigned to a well or pool, taking such action in connection therewith as it deems necessary and proper to protect the co-equal and correlative rights of producers and owners in the field and to prevent waste.