SECTION 165:10-13-10. Applications for reinstatement of cancelled underage for oil wells and for unallocated gas wells

(a)   Oil well.

(1)   With respect to an oil well, all underage for the proration period in excess of 15 percent of the allowable shall be automatically cancelled at the end of the proration period, except underage accrued under (4) of this subsection because of the failure to split a tank.

(2)   A producer may apply to reinstate cancelled underage if the well is capable of producing in excess of its allowable. The procedure for applying for reinstatement of cancelled underage is described in (c) of this Section.

(3)   Except in situations where the operator has failed to comply with applicable well testing and reporting requirements of the Commission, failure or refusal of the purchaser to take the allowable shall be grounds for reinstatement of any underage accumulated because of such failure or refusal. Underage of this nature may be accumulated until balanced by future runs.

(4)   The operator shall not be required to sell less than a full stock tank of oil by the end of the proration period to avoid cancellation of underage. Instead, such underage may be accrued until the operator accumulates and sells a volume of oil from the tank amounting to a full tank, and the sale of oil representing such underage shall not be considered as overage.

(b)   Unallocated gas well.

(1)   With respect to any unallocated gas well, of the total underage for the well or unit existing at the end of the proration period, 75% shall be automatically cancelled and 25% shall be automatically carried forward to the next prorationing period.

(2)   Said underage carried forward to the next balancing period must be utilized in said balancing period, with that amount of underage carried forward but not used, to be cancelled at the end of the prorationing period.

(c)   Procedure for reinstatement of cancelled underage.

(1)   The operator of an oil well may apply for reinstatement of cancelled underage by application for administrative approval on Form 1010 within 90 days after cancellation of the underage.

(2)   If the Conservation Division declines to approve the Form 1010 application, the applicant shall be notified in writing that application, notice, and hearing under 165:5-7-1 are necessary to obtain reinstatement of cancelled underage.

[Source: Amended at 16 Ok Reg 2206, eff 7-1-99]