§ 113‑394. Limitations on production; allocating and prorating "allowables."
(a) Whenever the total amount of oil, including condensate,which all the pools in the State can produce, exceeds the amount reasonablyrequired to meet the reasonable market demand for oil, including condensate,produced in this State, then the Department shall limit the total amount ofoil, including condensate, which may be produced in the State by fixing anamount which shall be designated "allowable" for this State, whichwill not exceed the reasonable market demand for oil, including condensate,produced in this State. The Department shall then allocate or distribute the"allowable" for the State among the pools on a reasonable basis andin such manner as to avoid undue discrimination, and so that waste will beprevented. In allocating the "allowable" for the State, and in fixing"allowables" for pools producing oil or hydrocarbons formingcondensate, or both oil and such hydrocarbons, the Department shall take intoaccount the producing conditions and other relevant facts with respect to suchpools, including the separate needs for oil, gas and condensate, and shallformulate rules setting forth standards or a program for the distribution ofthe "allowable" for the State, and shall distribute the"allowable" for the State in accordance with such standards orprogram, and where conditions in one pool or area are substantially similar tothose in another pool or area, then the same standards or programs shall beapplied to such pools and areas so that as far as practicable a uniform programwill be followed; provided, however, the Department shall permit the productionof a sufficient amount of natural gas from any pool to supply adequately thereasonable market demand for such gas for light and fuel purposes if suchproduction can be obtained without waste, and the condensate"allowable" for such pool shall not be less than the total amount ofcondensate produced or obtained in connection with the production of the gas"allowable" for light and fuel purposes, and provided further that,if the amount allocated to pool as its share of the "allowable" forthe State is in excess of the amount which the pool should produce to preventwaste, then the Department shall fix the "allowable" for the pool sothat waste will be prevented.
(b) The Department shall not be required to determine thereasonable market demand applicable to any single pool except in relation toall pools producing oil of similar kind and quality and in relation to the demandapplicable to the State, and in relation to the effect of limiting theproduction of pools in the State. In allocating "allowables" topools, the Department shall not be bound by nominations or desires ofpurchasers to purchase oil from particular fields or areas, and the Departmentshall allocate the "allowable" for the State in such manner as willprevent undue discrimination against any pool or area in favor of another orothers which would result from selective buying or nominating by purchasers ofoil, as such term "selective buying or nominating" is understood inthe oil business.
(c) Whenever the Department limits the total amount of oil orgas which may be produced in any pool in this State to an amount less than thatwhich the pool could produce if no restrictions were imposed (which limitationmay be imposed either incidental to, or without, a limitation of the totalamount of oil or gas which may be produced in the State), the Department shallprorate or distribute the "allowable" production among the producersin the pool on a reasonable basis, and so that each producer will have theopportunity to produce or receive his just and equitable share, as such shareis set forth in subsection G.S. 113‑392(d), subject to the reasonablenecessities for the prevention of waste.
(d) Whenever the total amount of gas which can be produced fromany pool in this State exceeds the amount of gas reasonably required to meetthe reasonable market demand therefrom, the Department shall limit the totalamount of gas which may be produced from such pool. The Department shall thenallocate or distribute the allowable production among the developed areas inthe pool on a reasonable basis, so that each producer will have the opportunityto produce his just and equitable share, as such share is set forth insubsection G.S. 113‑392(d), whether the restriction for the pool as awhole is accomplished by order or by the automatic operation of the prohibitoryprovisions of this law. As far as applicable, the provisions of subsection (a)of this section shall be followed in allocating any "allowable" ofgas for the State.
(e) After the effective date of any rule or order of theDepartment fixing the "allowable" production of oil or gas, or both,or condensate, no person shall produce from any well, lease, or property morethan the "allowable" production which is fixed, nor shall such amountbe produced in a different manner than that which may be authorized. (1945, c. 702, s. 14; 1973, c. 1262, s. 86; 1975, c.19, ss. 37, 38; 1987, c. 827, s. 112.)
§ 113‑394. Limitations on production; allocating and prorating "allowables."
(a) Whenever the total amount of oil, including condensate,which all the pools in the State can produce, exceeds the amount reasonablyrequired to meet the reasonable market demand for oil, including condensate,produced in this State, then the Department shall limit the total amount ofoil, including condensate, which may be produced in the State by fixing anamount which shall be designated "allowable" for this State, whichwill not exceed the reasonable market demand for oil, including condensate,produced in this State. The Department shall then allocate or distribute the"allowable" for the State among the pools on a reasonable basis andin such manner as to avoid undue discrimination, and so that waste will beprevented. In allocating the "allowable" for the State, and in fixing"allowables" for pools producing oil or hydrocarbons formingcondensate, or both oil and such hydrocarbons, the Department shall take intoaccount the producing conditions and other relevant facts with respect to suchpools, including the separate needs for oil, gas and condensate, and shallformulate rules setting forth standards or a program for the distribution ofthe "allowable" for the State, and shall distribute the"allowable" for the State in accordance with such standards orprogram, and where conditions in one pool or area are substantially similar tothose in another pool or area, then the same standards or programs shall beapplied to such pools and areas so that as far as practicable a uniform programwill be followed; provided, however, the Department shall permit the productionof a sufficient amount of natural gas from any pool to supply adequately thereasonable market demand for such gas for light and fuel purposes if suchproduction can be obtained without waste, and the condensate"allowable" for such pool shall not be less than the total amount ofcondensate produced or obtained in connection with the production of the gas"allowable" for light and fuel purposes, and provided further that,if the amount allocated to pool as its share of the "allowable" forthe State is in excess of the amount which the pool should produce to preventwaste, then the Department shall fix the "allowable" for the pool sothat waste will be prevented.
(b) The Department shall not be required to determine thereasonable market demand applicable to any single pool except in relation toall pools producing oil of similar kind and quality and in relation to the demandapplicable to the State, and in relation to the effect of limiting theproduction of pools in the State. In allocating "allowables" topools, the Department shall not be bound by nominations or desires ofpurchasers to purchase oil from particular fields or areas, and the Departmentshall allocate the "allowable" for the State in such manner as willprevent undue discrimination against any pool or area in favor of another orothers which would result from selective buying or nominating by purchasers ofoil, as such term "selective buying or nominating" is understood inthe oil business.
(c) Whenever the Department limits the total amount of oil orgas which may be produced in any pool in this State to an amount less than thatwhich the pool could produce if no restrictions were imposed (which limitationmay be imposed either incidental to, or without, a limitation of the totalamount of oil or gas which may be produced in the State), the Department shallprorate or distribute the "allowable" production among the producersin the pool on a reasonable basis, and so that each producer will have theopportunity to produce or receive his just and equitable share, as such shareis set forth in subsection G.S. 113‑392(d), subject to the reasonablenecessities for the prevention of waste.
(d) Whenever the total amount of gas which can be produced fromany pool in this State exceeds the amount of gas reasonably required to meetthe reasonable market demand therefrom, the Department shall limit the totalamount of gas which may be produced from such pool. The Department shall thenallocate or distribute the allowable production among the developed areas inthe pool on a reasonable basis, so that each producer will have the opportunityto produce his just and equitable share, as such share is set forth insubsection G.S. 113‑392(d), whether the restriction for the pool as awhole is accomplished by order or by the automatic operation of the prohibitoryprovisions of this law. As far as applicable, the provisions of subsection (a)of this section shall be followed in allocating any "allowable" ofgas for the State.
(e) After the effective date of any rule or order of theDepartment fixing the "allowable" production of oil or gas, or both,or condensate, no person shall produce from any well, lease, or property morethan the "allowable" production which is fixed, nor shall such amountbe produced in a different manner than that which may be authorized. (1945, c. 702, s. 14; 1973, c. 1262, s. 86; 1975, c.19, ss. 37, 38; 1987, c. 827, s. 112.)
§ 113‑394. Limitations on production; allocating and prorating "allowables."
(a) Whenever the total amount of oil, including condensate,which all the pools in the State can produce, exceeds the amount reasonablyrequired to meet the reasonable market demand for oil, including condensate,produced in this State, then the Department shall limit the total amount ofoil, including condensate, which may be produced in the State by fixing anamount which shall be designated "allowable" for this State, whichwill not exceed the reasonable market demand for oil, including condensate,produced in this State. The Department shall then allocate or distribute the"allowable" for the State among the pools on a reasonable basis andin such manner as to avoid undue discrimination, and so that waste will beprevented. In allocating the "allowable" for the State, and in fixing"allowables" for pools producing oil or hydrocarbons formingcondensate, or both oil and such hydrocarbons, the Department shall take intoaccount the producing conditions and other relevant facts with respect to suchpools, including the separate needs for oil, gas and condensate, and shallformulate rules setting forth standards or a program for the distribution ofthe "allowable" for the State, and shall distribute the"allowable" for the State in accordance with such standards orprogram, and where conditions in one pool or area are substantially similar tothose in another pool or area, then the same standards or programs shall beapplied to such pools and areas so that as far as practicable a uniform programwill be followed; provided, however, the Department shall permit the productionof a sufficient amount of natural gas from any pool to supply adequately thereasonable market demand for such gas for light and fuel purposes if suchproduction can be obtained without waste, and the condensate"allowable" for such pool shall not be less than the total amount ofcondensate produced or obtained in connection with the production of the gas"allowable" for light and fuel purposes, and provided further that,if the amount allocated to pool as its share of the "allowable" forthe State is in excess of the amount which the pool should produce to preventwaste, then the Department shall fix the "allowable" for the pool sothat waste will be prevented.
(b) The Department shall not be required to determine thereasonable market demand applicable to any single pool except in relation toall pools producing oil of similar kind and quality and in relation to the demandapplicable to the State, and in relation to the effect of limiting theproduction of pools in the State. In allocating "allowables" topools, the Department shall not be bound by nominations or desires ofpurchasers to purchase oil from particular fields or areas, and the Departmentshall allocate the "allowable" for the State in such manner as willprevent undue discrimination against any pool or area in favor of another orothers which would result from selective buying or nominating by purchasers ofoil, as such term "selective buying or nominating" is understood inthe oil business.
(c) Whenever the Department limits the total amount of oil orgas which may be produced in any pool in this State to an amount less than thatwhich the pool could produce if no restrictions were imposed (which limitationmay be imposed either incidental to, or without, a limitation of the totalamount of oil or gas which may be produced in the State), the Department shallprorate or distribute the "allowable" production among the producersin the pool on a reasonable basis, and so that each producer will have theopportunity to produce or receive his just and equitable share, as such shareis set forth in subsection G.S. 113‑392(d), subject to the reasonablenecessities for the prevention of waste.
(d) Whenever the total amount of gas which can be produced fromany pool in this State exceeds the amount of gas reasonably required to meetthe reasonable market demand therefrom, the Department shall limit the totalamount of gas which may be produced from such pool. The Department shall thenallocate or distribute the allowable production among the developed areas inthe pool on a reasonable basis, so that each producer will have the opportunityto produce his just and equitable share, as such share is set forth insubsection G.S. 113‑392(d), whether the restriction for the pool as awhole is accomplished by order or by the automatic operation of the prohibitoryprovisions of this law. As far as applicable, the provisions of subsection (a)of this section shall be followed in allocating any "allowable" ofgas for the State.
(e) After the effective date of any rule or order of theDepartment fixing the "allowable" production of oil or gas, or both,or condensate, no person shall produce from any well, lease, or property morethan the "allowable" production which is fixed, nor shall such amountbe produced in a different manner than that which may be authorized. (1945, c. 702, s. 14; 1973, c. 1262, s. 86; 1975, c.19, ss. 37, 38; 1987, c. 827, s. 112.)
