259.090. Production--controls and allocations authorized. - Missouri Statutes

Production--controls and allocations authorized.

259.090. The council shall determine market demand for eachmarketing district and shall regulate the amount of production asfollows:

(1) The council shall limit the production of oil and gaswithin each marketing district to that amount which can beproduced without waste, and which does not exceed the reasonablemarket demand.

(2) Whenever the council limits the total amount of oil orgas which may be produced in the state or a marketing district,the council shall allocate or distribute the allowable productionamong the pools therein on a reasonable basis, giving, wherereasonable under the circumstances to each pool with small wellsof settled production, an allowable production which prevents thegeneral premature abandonment of such wells in the pool.

(3) Whenever the council limits the total amount of oil orgas which may be produced in any pool in this state to an amountless than that amount which the pool could produce if norestriction was imposed, regardless of whether or not thelimitation is imposed in relation to the limitation on the totalamount of oil or gas produced in the marketing district whereinthe pool is located, the council shall allocate or distribute theallowable production among the several wells or producingproperties in the pool on a reasonable basis, preventing orminimizing reasonable avoidable drainage, so that each propertywill have the opportunity to produce or to receive its just andequitable share, subject to the reasonable necessities for theprevention of waste.

(4) In allocating the market demand for gas as between poolswithin marketing districts, the council shall give due regard tothe fact that gas produced from oil pools is to be regulated in amanner as will protect the reasonable use of its energy for oilproduction.

(5) The council shall not be required to determine thereasonable market demand applicable to any single pool, except inrelation to all other pools within the same marketing district,and in relation to the demand applicable to the marketingdistrict. In allocating allowables to pools, the council mayconsider, but shall not be bound by, nominations of purchasers topurchase from particular fields, pools, or portions thereof. Thecouncil shall allocate the total allowable for the state in suchmanner as prevents undue discrimination between marketingdistricts, fields, pools, or portions thereof resulting fromselective buying or nomination by purchasers.

(L. 1965 2d Ex. Sess. p. 917 § 9)