§ 15-72-324 - Limitation on production. - Arkansas Statutes

15-72-324. Limitation on production.

(a) Whenever the Oil and Gas Commission limits the total amount of oil or gas which may be produced in this state, the limit so fixed shall not be less than the aggregate of the allowables fixed for each separate pool in this state for the prevention of waste in accordance with the foregoing definition of waste, plus the production from unrestricted pools. It shall allocate or distribute the allowable so fixed among the separate pools. The allocation or distribution among the pools of the state shall be made on a reasonable basis, giving to each pool with small wells of settled production an allowable production which will not accelerate or encourage a general premature abandonment of the wells in the pool.

(b) Whenever the commission limits the total amount of oil or gas which may be produced in any pool in this state to an amount less than that amount which the pool could produce if no restriction were imposed, which limitation may be imposed either incidentally to, or without, a limitation of the total amount of oil or gas which may be produced in the state, the commission shall prorate or distribute the allowable production among the producers in the pool on a reasonable basis so as to prevent or minimize reasonably avoidable drainage from each developed unit which is not equalized by counterdrainage and so that each producer will have the opportunity to produce or receive his or her just and equitable share, as above set forth, subject to the reasonable requirements for the prevention of waste.

(c) After the effective date of any rule, regulation, or order of the commission fixing the allowable production of oil or gas, or both, for any pool, no person shall produce from any well, lease, or property more than the allowable production which is applicable, nor shall such amount be produced in a different manner than that which may be authorized.