SECTION 165:10-17-8. Allocated pools

(a)   The current monthly allowable for each allocated pool shall be equal to the total production from the pool during the current month.

(b)   The current allowable for each capable drilling and spacing unit within the pool shall be that proportion of the pool allowable that the acreage of the drilling and spacing unit bears to the total developed acreage in the pool, adjusted in accordance with any order of the Commission imposing an allowable adjustment. The current allowable for each limited drilling and spacing unit shall be equal to the current production from the unit. A unit shall be deemed limited when its underage is cancelled under this Section until it thereafter produces a current allowable for any one month.

(c)   Accrued underage shall be carried forward as a cumulative credit by adding it to the unit's current allowable until the underage has been produced. If the unit's cumulative underage exceeds six times the allowable assigned to it for the preceding January, all of the underage will be cancelled, the unit shall be classified as "limited", and the unit shall not thereafter accumulate underage until such time as the unit produces a current allowable for any one month. All cancelled underage shall be distributed to the capable drilling and spacing units within the pool in the proportion that the acreage of each unit bears to the total capable acreage in the Pool, adjusted in accordance with any order of the Commission imposing an allowable adjustment. A capable unit shall be any non-limited unit. Cancelled underage may be reinstated administratively by the Director of Conservation to any capable unit in an overproduced status within six months after cancellation by application on Form 1010.

(d)   Accrued overage shall be carried forward as a cumulative charge against the unit by subtracting it from the unit's current allowable until the overage has been made up. If the cumulative overage exceeds six times the current allowable assigned for the preceding January, the Director of Conservation shall notify the operator in writing, and the unit shall thereafter be permitted to produce not more than 25 percent of its current allowable until all of the overage in excess of six times the well's current allowable for the preceding January has been made up. In the event the operator fails to limit production as herein provided, the well shall be ordered shut-in by the Commission upon application of the Director of Conservation and after notice and hearing.

(e)   If a unit did not have a current allowable assigned to it on a full month's basis for the preceding January, the first current allowable assigned to the unit on a full month's basis shall be used as reference for the purpose of limiting underage and overage.