News from the Oklahoma Corporation Commission

OKLAHOMA CITY – The Oklahoma Corporation Commission has issued an order that keeps the production ceiling on most Oklahoma gas wells at its present level during the fourth quarter of 1999 and the first quarter of 2000.

The order formalizes a vote by the commissioners to keep the cap at the greater of 65 percent of wellhead open flow potential or 2 million cubic feet of gas per day for unallocated wells, which are not regulated by field production limits.

The present ceiling was set for the second and third quarters of 1999. The commission staff and several major gas producers recommended that it be continued.

Most of approximately 29,000 gas wells in Oklahoma are unallocated, but the production cap affects few of them because most wells aren't able to produce up to the allowed volumes.

The order said keeping the production cap at its present level is necessary to provide a stable environment to encourage drilling. The order said the commission will continue to do what it can to encourage the expenditure of funds for exploration, drilling, production and distribution of Oklahoma gas.

Restricting production from high-volume wells is designed to give all producers a chance to share in the available market for gas. Corporation Commission rules require a review of production limits twice each year, before the start of the summer and winter gas-buying seasons.

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