Effect on Gas Proration of Recent Special Orders

Natural gas is no longer the undesirable, troublesome by-product of oil production that it was just a few years ago. Table 1, a summary of Texas gas production from 1936 to 1958, highlights the tremendous increase in Texas gas production since World War II. Texas produced 6.05 trillion cu ft of gas in 1958, and this gas production is paying the way for many operators during the current low oil flow days. Gas proration is becoming more important as Texas gas production increases and should be generally understood by all producers and purchasers of gas of Texas. New special orders, issued since 1955, are explained in the paper. Texas Railroad Commission's Duties The Texas Railroad Commission's basic duty in gas proration is to determine the market demand for gas from a field, then to grant that demand as the field allowable in such manner as to allow each well its ratable share. The Commission is required by statute (Article 6008, Section 1 of the Revised Civil Statutes of Texas) to prorate and regulate gas production in such manner thatboth public and private interests will be protected from waste,correlative rights will be protected, andratable take will be obtained from all wells producing from a common reservoir. The present basic method used to determine the market demand in Texas gas fields is the monthly nominations from all producers in a field. Each gas reservoir is prorated separately in Texas, and nominations are required from each producer in the reservoir. However, past experience has clearly shown that these nominations do not always accurately indicate the true market demand in a field. Adjustments are necessary to keep the nominations and the actual reported production of each field in balance. The Commission adds the nominations from each producer to determine the market demand for that month; then this demand is adjusted by the difference between the total nominations and the actual production from that reservoir for the third previous month. The nomination and production for the third previous month must be used because monthly gas reports (Form 3–266-A) are not required until the last day of the month following the month for which the report is made. For example, in preparation of the gas schedules for October, the difference between the July nominations and July production is applied against the October nominations to obtain the October allowable for a field. A monthly gas schedule is issued for each prorated gas reservoir in Texas on the first day of each month showing the monthly allowable in thousands of cubic feet of every gas well in that reservoir.