Texas Administrative Code › Title 31 - NATURAL RESOURCES AND CONSERVATION › Part 1 - GENERAL LAND OFFICE › Chapter 9 - EXPLORATION AND LEASING OF STATE OIL AND GAS › Subchapter C - MAINTAINING A STATE OIL AND GAS LEASE › Section 9.35 - Producing the State Lease

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  General provisions applicable to producing oil and/or gas on state leases.
(1) The GLO will treat a well as
				  non-producing if no RRC production reports are filed for that well or if
				  reports showing zero production are filed with the RRC for that well.
(2) All wells producing natural gas and water
				  or natural gas and surface hydrocarbon liquids or natural gas, water and
				  surface hydrocarbon liquids must be produced through oil and gas separators of
				  ample capacity and in good working order. All separators shall be of
				  conventional type (or other equipment at least as efficient) to provide for
				  separation and measurement of all lease or pooled unit gas and liquid
				  hydrocarbon production before sale or surface commingling with production from
				  any other lease and/or pooled unit. All measurement shall be in accordance with
				  the American Gas Association (AGA) standards and all applicable chapters of the
				  American Petroleum Institute (API) Manual of Petroleum Measurement Standards
				  (MPMS) subject to the following:
(A) gross
				  lease or pooled unit gas and liquid hydrocarbon production must be measured by,
				  at the option of the lessee, either:
(i)
				  continuous measurement; or
(ii)
				  utilization of periodic production well tests as described in MPMS Chapter 20.5
				  with each lease or pooled unit being tested at least once per month;
				  and
(B) all lessees
				  shall perform both gas and oil sampling with compositional analyses at the
				  outlet of the initial stage of separation for each lease and/or pooled unit
				  with:
(i) the gas sampling occurring within
				  fifteen (15) days of the expiration of each six (6) month interval;
				  and
(ii) the oil sampling occurring
				  initially within thirty (30) days after completion of the well, and again
				  between 24 to 36 months after such initial sampling.
(3) Industry standard laboratory
				  analysis shall be performed on such samples in compliance with ASTM, API, and
				  GPA standards for gas and oil. Lessees shall retain the foregoing required oil
				  and gas analysis data and make such data available to the GLO as directed per
				  the authority retained under §
											9.32(c)(3)(D)
				  of this title, upon request. Requests submitted by the lessee shall be sent to
				  the Texas General Land Office, Attention: Mineral Leasing, 1700 N. Congress
				  Ave., Austin, TX 78701-1495.
(4)
				  Lessee shall obtain written permission from GLO before surface commingling
				  state lease or state pooled-unit production with private lease production or
				  before surface commingling oil and/or gas from two separate state leases and/or
				  pooled state units. Lessee shall obtain written permission from GLO staff
				  before down-hole commingling production from two or more intervals where the
				  state's royalty interests differ between the proposed commingled intervals.
				  Send commingling requests to the Texas General Land Office, Attention: Mineral
				  Leasing, 1700 North Congress Avenue, Austin, TX 78701-1495. The requirement to
				  obtain GLO staff approval applies to all commingle exception applications
				  including new permits and amendments to existing permits.
(5) If, within a group of properties
				  comprised of surface commingled leases, tracts, and/or pooled units (Commingled
				  Properties):
(A) all state leases pertaining
				  to the Commingled Properties were executed prior to January 7, 1999;
				  or
(B) the State's largest revenue
				  interest among the Commingled Properties is less than 5.000%; or
(C) the State has a net revenue interest in
				  each and all of the Commingled Properties and those net revenue interests are
				  identical to a tolerance of 0.001, then upon written certification by lessee to
				  the GLO that one or more of these conditions has been met, such Commingled
				  Properties are deemed to have obtained permission from the GLO as required
				  under §
												9.35(a)(3)
				  of this title until and unless additional, non-qualifying surface commingling
				  occurs in conjunction with the Commingled Properties, at which time written
				  permission from the GLO shall be required.