La. Admin. Code tit. 43 § XIX-1505

Current through Register Vol. 50, No. 11, November 20, 2024

Section XIX-1505 - Order

A. From and after the effective date hereof, permission to commingle gas and/or liquid hydrocarbons and to use metering, well test or other methods for allocation of production may be obtained as hereinafter provided and upon strict compliance with the procedures set forth herein.

1. Metering

a. No authority to commingle gas and/or liquid hydrocarbons and to use metering for allocation of production will be granted unless and until the following data and information have been filed with the commissioner with a copy to the district manager:

i. a completed application form for permission to commingle gas and/or liquid hydrocarbon production along with the requisite fee;

ii. a diagrammatic sketch of the mechanical installation to be used along with a detailed explanation of the flow of the gas and/or liquid hydrocarbons, the procedures and frequency for calibration/proving of metering devices and allocation formula to be utilized;

iii. a signed statement that, in the opinion of the applicant, the commingling of gas and/or liquid hydrocarbons and the use of metering for allocation of production in a manner proposed will provide reasonably accurate measurement, will not create inequities, and will afford the owner of any interest the opportunity to recover his just and equitable share of production;

iv. a list of interested parties. This list shall include only those parties who have interests in the leases and/or units from which production is to be commingled if approval is granted to the applicant and for which the applicant has no existing commingling authority.

b. Notice of the filing of an application to commingle and to use metering for allocation of production shall be published in the official journal of the state of Louisiana (by the Office of Conservation) and mailed (by the applicant) to the interested parties with an affidavit of mailing submitted to the Office of Conservation. A copy of the application does not have to be mailed to all interested parties.

c. No administrative approval for the commingling of gas and/or liquid hydrocarbons and the use of metering for allocation of production will be granted, if, in the judgment of the commissioner, after considering all the data and information submitted, including any opposition expressed by interested parties, administrative approval is not warranted, or in the event any interested party files an application for a public hearing opposing the granting of commingling authority, together with the requisite hearing fee, within 10 days following the first publication of the notice of the application. The party seeking commingling authority may also elect to file an application setting the matter for consideration at a public hearing if administrative approval is not granted.

d. Should the application for the use of metering be approved, the applicant shall provide a suitable means of testing each meter in order that the accuracy of any meter in operation can be proven, such testing to be done monthly for liquid hydrocarbon allocation meters and quarterly for gaseous hydrocarbon allocation meters or at such other times as the Commissioner of Conservation shall prescribe. The applicant shall retain the actual reports of such tests, and such reports shall be kept on file and available for inspection by any agent of the Office of Conservation or any interested party for a period of not less than three years. Permission, in writing, from the Office of Conservation must be obtained for all by-pass or other lines that will permit flow around the regular meter, and each such line must have a meter that will permit measurement. The commissioner may grant an exception to this requirement if it is established to his satisfaction that good grounds exist justifying said exception.

e. Emergency authorization to commingle may be obtained from the Office of Conservation for 90 days upon proper showing that the methods of production and allocation meet the minimum standards necessary for formal approval if the well(s) would otherwise have to remain shut-in pending formal approval. Under exceptional circumstances this period may be extended for good cause shown but for no longer than needed for an applicant diligently pursuing formal approval.

f. Consolidation of two or more facilities may be approved administratively without the necessity of a public hearing by submitting a request for such to the Office of Conservation.

g. All allocation measurements must be in accordance with the American Petroleum Institute (API) Manual of Petroleum Measurement Standards, Chapter 20, Allocation Measurement.

2. Well Tests

a. No authority to commingle gas and/or liquid hydrocarbons and to use well tests for allocation of production will be granted unless and until the following data and information have been filed with the commissioner with a copy to the district manager:

i. a completed application form for permission to commingle gas and/or liquid hydrocarbon production along with the requisite fee;

ii. a diagrammatic sketch of the mechanical installation to be used along with a detailed explanation of the flow of the gas and/or liquid hydrocarbons, the procedures and frequency of well tests and for calibration/proving of any metering devices and allocation formulas to be utilized;

iii. a signed statement that, in the opinion of the applicant, the commingling of gas and/or liquid hydrocarbons and the use of well tests for allocation of production in the manner proposed will provide reasonably accurate measurement, will not create inequities, and will afford the owner of any interest the opportunity to recover his just and equitable share of production;

b. The application shall also include:

i. written approval of 100 percent of all interested parties; or

ii. a request for a public hearing pursuant to R.S. 30:6; or

iii. if the applicant can demonstrate that one or more prior commingling applications for the use of well test allocation at the subject commingling facility have been unsuccessful in obtaining 100 percent approval, that approval was granted by order after a public hearing, and that all leases involved in the subject application are the same as the prior applications (i.e., no new leases), then the applicant may request, and the commissioner may authorize, the processing of such application under the same procedures outlined in §1505. A.2 of this Statewide Order.

c. Should the application for the approval of the use of well tests be approved, such testing shall be done in a manner that meets or exceeds the minimum standards set forth herein below.

i. All wells shall be tested a minimum four hours at least once a month to determine productivity rate.

ii. Wells having any erratic producing characteristics that cause variable rates of flow while producing on a continuous choke size shall be tested a minimum of four hours biweekly to determine productivity rate.

iii. If at any time between the regular testing periods, as outlined above, the choke size of any well is changed, the time and date of change shall be recorded and productivity rate test conducted after the well has stabilized on the new choke. Production allocation shall be made according to these various productivity rates for the time they were in effect.

iv. If at any time the choke in a well is changed because of wear, tests shall be conducted before the choke is changed and after the well has stabilized on the new choke. The average rate between the previous productivity rate test and the productivity rate test conducted immediately after the choke has been changed shall be used to determine production for this period back to the first day of the current month.

v. If the producing characteristics of a well significantly change between the regular testing periods, such as: the beginning or increase in water percentage; a change in gas-oil ratio, especially above the 2000/1 limit; or considerable change in tubing pressure, etc., then tests shall be made at no longer than one-week intervals until production again stabilizes.

vi. Daily checks on individual wellhead pressures shall be recorded and maintained by the operator of each well covered by the approval to commingle by well tests, provided weather permits.

vii. If any operator feels that some other interval of testing is appropriate, he may request an exception to the above guidelines by writing the commissioner with a copy to the district manager outlining his problems and suggested interval of testing. The commissioner may, after consultation with the district manager and staff, grant such exceptions as he deems appropriate by special administrative order without a public hearing.

viii. All allocation measurements must be in accordance with the American Petroleum Institute (API) Manual of Petroleum Measurement Standards, Chapter 20, Allocation Measurement.

d. All required tests shall be recorded on Form DM-1-R, Form DT-1, or a document with a similar format and made available for inspection by any agent of the Office of Conservation or any interested party for a period of not less than three years.

e. Emergency application to commingle may be obtained from the Office of Conservation for 90 days upon proper showing that the methods of production and allocation meet the minimum standards necessary for formal approval if the well(s) would otherwise have to remain shut-in pending formal approval. Under exceptional circumstances this period may be extended for good cause shown but for no longer than needed for an applicant diligently pursuing formal approval.

f. Consolidation of two or more facilities may be approved administratively without the necessity of a public hearing by submitting a request for such to the Office of Conservation.

3. Other

a. If any operator feels that commingling of gas and/or liquid hydrocarbons utilizing some method other than metering or well tests for allocation of production is appropriate, he may seek permission to do so in the manner hereinafter provided and upon strict compliance with the procedures set forth herein.

b. No authority to commingle gas and/or liquid hydrocarbon production utilizing any method will be granted unless and until the following data and information have been filed with the commissioner with a copy to the district manager:

i. a completed application form for permission to commingle gas and/or liquid hydrocarbon production along with the requisite fee;

ii. a diagrammatic sketch of the mechanical installation to be used along with a detailed explanation of the flow of the gas and/or liquid hydrocarbons and the manner in which measurement and allocation will be accomplished, including the procedures and frequency of well tests, calibration/proving of any metering devices and allocation formulas to be utilized;

iii. a signed statement that, in the opinion of the applicant, the commingling of gas and/or liquid hydrocarbons and the use of the method cited for allocation of production in the manner proposed will provide reasonably accurate measurement, will not create inequities, and will afford the owner of any interest the opportunity to recover his just and equitable share of production;

c. The commissioner shall advise the applicant whether such application will be processed under the provisions of §1505 A1-2, or some alternative procedure he deems appropriate at his discretion, and the applicant shall take the actions so mandated if he wishes to continue pursuit of approval of his application.

d. Emergency authorization to commingle may be obtained from the Office of Conservation for 90 days upon proper showing that the methods of production and allocation meet the minimum standards necessary for formal approval if the well(s) would otherwise have to remain shut-in pending formal approval. Under exceptional circumstances this period may be extended for good cause shown but for no longer than needed for an applicant diligently pursuing formal approval.

e. Consolidation of two or more facilities may be approved administratively without the necessity of a public hearing by submitting a request for such to the Office of Conservation.

f. This Statewide Order shall supersede Statewide Order No. 29-D, but shall be in addition to all other statewide orders, rules and regulations affecting the drilling and production of gas and/or liquid hydrocarbons heretofore promulgated. To the extent of any conflict with such other orders, rules and regulations, however, provisions of this Statewide Order shall govern. In case of any conflict between this Statewide Order and the special orders on specific fields, said special orders on specific fields shall govern.

La. Admin. Code tit. 43, § XIX-1505

Adopted by the Department of Conservation, March 1, 1955, amended February 25, 1957, June 1, 1962, amended and promulgated by the Department of Natural Resources, Office of Conservation, LR 19:768 (June 1993), amended LR 23:585 (May 1997).

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:4 et seq.