News from the Oklahoma Corporation Commission

OKLAHOMA CITY – The Oklahoma Corporation Commission Wednesday (March 10) voted to increase the amount of gas unallocated wells may produce to the greater of 65 percent of wellhead open flow potential or 2 million cubic feet per day from April through September of 1999.

The production ceiling has been the greater of 65 percent or 1.3 million cubic feet per day since January 1997. The commission staff had recommended raising the cap to 65 percent or 2.6 million cubic feet per day.

The order was approved by a 2-1 vote. Chairman Ed Apple dissented. The 2 million cubic-feet-per-day production cap was a compromise, the order said.

Apple said he favored raising allowable production to 2.6 million cubic feet per day to encourage more production of Oklahoma gas, which has been declining since 1990. In supporting the higher limits, Apple emphasized that proration orders are only for six months and can be revised by emergency orders if unforeseen problems occur.

Commissioner Denise Bode wanted the ceiling kept at 1.3 million cubic feet per day; however, she approved the 2 million cubic feet per day compromise in an effort to "mitigate possible harm to producers and prevent encroachment of correlative rights within the state." Bode said efforts will be made by the commission staff to ensure that potentially impacted producers are notified of the change and are given the opportunity to discuss any detrimental effects with her office.

Commissioner Bob Anthony proposed the 2 million cubic feet per day compromise.

Although most of Oklahoma’s 29,000 to 30,000 active gas wells are unallocated – not regulated by production allocations for specific fields – fewer than a hundred are expected to utilize the higher production ceiling since few wells are able to produce 2 million cubic feet of gas per day, commission records indicate.

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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