News from the Oklahoma Corporation Commission

Office of Public Information -- Phone: (405) 521-4180 FAX (405) 521-6945

FOR IMMEDIATE RELEASE Contact: Patrick K. Petree Reference: O&G22698-12

Corporation Commission Will Continue Present Gas Production Limits

OKLAHOMA CITY -- The Oklahoma Corporation Commission voted Thursday (Feb. 26) to accept a staff recommendation to continue production limits for unallocated gas wells at the greater of 65 percent of wellhead open flow potential or 1.3 million cubic feet per day through the second and third quarters of 1998.

The present production maximums have been in effect since January 1997. Continuation also was recommended by gas producers, including the Oklahoma Independent Petroleum Association, that participated in a technical conference on Feb. 9.

"Continued growth in (gas) demand is seen. There continues to be a market for Oklahoma gas. Market forces still seem to be reliable as controls on all facets of the natural gas industry," Claude McNully, Corporation Commission technical manager, said.

McNully said current production ceilings restrict very few wells since most of Oklahoma's approximately 30,000 wells can't produce enough gas to reach the ceiling. But the high production allowable is necessary to help encourage exploration for gas, he said.

McNully noted that the commission has seen a "substantial drop" in applications for drilling permits.

"Operators tell us they need to be assured that their wells will not be unduly curtailed in order to justify continued drilling in Oklahoma. Absent the feeling that relative stability is being maintained, the level of drilling activity would be even lower," McNully said.

-occ-