LEGAL STOCK

LEGAL STOCK. Each producer or operator is prohibited from delivering illegal oil to any transporter, and each transporter is prohibited from removing any illegal oil. Each transporter shall maintain necessary records of lease allowables and quantities of oil removed from the leases to which he is connected, whereby he can determine the calculated quantity of legal oil on hand at the close of each calendar month with respect to such leases. The calculated quantity of legal oil on hand with respect to any lease shall be determined for each succeeding month by adding to the quantity of legally produced oil on hand at the first of the month, the scheduled allowable quantity of oil for the respective lease for the current month, as established by the Board, less the quantity of oil removed from the respective lease tanks during the current month. If the calculated balance so determined is less than the actual gauged quantity on hand as reported in "Producer's Monthly Report," Form No. OGB 9-12-15-Z, the transporter shall not remove during the month any oil in excess of the calculated legal balance so established plus the allowable for the month. If the actual quantity of oil on hand with respect to a particular lease equals or is less than the quantity of legal oil established by the above method, the transporter may remove any part of all of such quantity of oil during the current month. Where the actual quantity of oil on hand with respect to a particular lease is less than the calculated quantity of legal oil established by the above method, the transporter, in determining the quantity of legal oil for the next succeeding month, shall substitute the actual quantity on hand for the calculated quantity on hand. Where there is more than one transporter moving oil from the same lease, the producer or operator and transporters are required to furnish to each other information as to the quantity of oil on hand, the quantity transported from lease tanks and any additional information necessary to establish to the satisfaction of each person involved the legal status of the oil produced. Where transporter disconnects from a particular lease or ceases to remove oil therefrom and another transporter connects to such lease or begins to take oil therefrom, during a month, the transporter who ceases to take oil shall furnish the connecting transporter a certified statement, under oath, showing the legal quantity of oil on hand 7:00 A.M. the first day of such month, the scheduled allowable to the date disconnected, and the quantity of oil moved from the particular lease during the current month. In such case, the producer or operator shall furnish to the connecting transporter a certified statement, under oath, showing the lease stock on hand 7:00 A.M. the date of new connection. No connecting transporter shall move oil from any such lease until after it shall have received such statements, except with the written permission of the Board. In cases where crude oil is transported from lease to final destination by a combination haul, that is, truck and pipeline, the responsibility of securing the certificate of compliance and authorization to transport oil from lease shall be determined by which of the two carriers takes custody of the oil at the lease tankage. Custody of the oil shall have been accomplished when the transporter issues a receipt ticket for the oil at the lease tankage. The carrier issuing the receipt ticket at the lease tank shall be the carrier named in the certificate of compliance.