North Dakota Administrative Code › Title 43 - Industrial Commission › Article 43-02 - Mineral Exploration and Development › Chapter 43-02-10 - Certification of Secondary and Tertiary Recovery Projects - Determination of Incremental Production › Section 43-02-10-06 - Incremental production determination for a secondary recovery project

Current through Supplement No. 393, July, 2024
1.
a.In a
				unit where there has not been a secondary recovery project, the commission will
				establish a primary production decline curve. In such instance, incremental
				production is the production above the established primary production decline
				curve which production is a result of the secondary recovery project.
b. The total amount of primary production
				from the unit will be determined by the commission through the use of a
				computer-generated production decline curve developed by software used by the
				commission at the time of certification. The decline curve will be a production
				versus time plot. The oil production and the time used to develop the curve
				will be that production occurring and period of time from the latest peak in
				production through the last month of oil production prior to the month in which
				secondary recovery project operations commence. However, the director shall
				have discretionary authority to select a different period of time to establish
				the decline curve if deemed necessary to obtain a more accurate estimate of the
				ultimate primary production.
c.
				The production decline curve established in subdivision b of this subsection is
				projected from the end of the last month in which production was used to
				develop the primary decline curve to a producing rate of one barrel of oil per
				well per day, but no projection shall be made greater than fifty years in
				duration. All production above the projected decline curve is incremental
				production and production below the decline curve is primary production. The
				total projected primary production, on a monthly basis in numerical form, is
				derived from the projected primary production decline curve. A copy of the
				projected monthly primary production, in numerical form, will be furnished to
				the unit operator and the tax commissioner.
d. For purposes of determining the primary
				production provided for in this subsection, where practices and procedures used
				by the commission cannot be used because production has been restricted due to
				the prolific nature of the reservoir (such as a Lodgepole reservoir), where
				unitization is accomplished early in the life of the reservoir, and sufficient
				primary production history does not exist for decline curve analysis, the
				commission will have the authority to determine an alternate method using
				fundamental reservoir engineering principles. One example the commission might
				use is a pressure decline versus cumulative production plot to estimate the
				ultimate primary production. Based on available data and reservoir
				characteristics an initial rate and decline percent would be extrapolated to
				match the estimated ultimate recovery. In this case the operating company would
				be required to monitor the reservoir pressure and production and coordinate all
				activities and measurements with the commission.