Printable Format55-604. Powers of commission; proration of production; approval of plan or distribution. (a) The commission shall have and is hereby given jurisdiction and authority:
(1) Over all matters involving the application and enforcement of this act;
(2) to make and enforce rules, regulations and orders for the prevention of waste as defined by K.S.A. 55-602 and amendments thereto and for carrying out and enforcing each and all of the provisions of this act;
(3) to employ or appoint such agent or agents as necessary to enforce and administer the provisions of this act and rules, regulations and orders adopted or issued under this act. Such agent or agents, with the exception of clerical help, shall be experienced in and conversant with the oil business; and
(4) as otherwise provided, without limiting the generality of the foregoing authority provided in this section.
(b) In prorating the production allowed to each pool among the wells in the pool, the commission shall take into consideration, among such other factors as it finds proper, and give due and proper weight to:
(1) The productivity of each such well as determined by such reasonable method as the commission shall adopt for the pool;
(2) the acreage of each well owner which is reasonably attributable to each of the owner's wells; and
(3) the efficient utilization of the reservoir energy in the pool, except that the allowable production of any well in any prorated pool shall not be reduced below 25 barrels per day. The 25 barrels per day minimum per well allowable may be reduced proportionately when the acreage attributable to any well is less than the number of acres in a spacing unit established by the corporation commission for wells in a spaced pool. In the absence of such a spacing unit, when the acreage attributable to any well is less than 10 acres, the 25 barrels per day minimum per well allowable may be reduced in the proportion that the acreage attributable to the well bears to 10 acres, except that the reduction in the 25 barrels per day minimum per well allowable by virtue of acreage adjustment shall not apply to oil and gas wells drilled or commenced prior to the effective date of this act.
(c) When it appears to the commission that those having a right to drill into and produce oil from any pool, part of any pool or prospective pool, in this state, have unanimously agreed upon a plan for the development of such pool, part of any pool or prospective pool or for the distribution of allowed production in the pool, the commission, after notice and hearing in accordance with the provisions of the Kansas administrative procedure act, may approve such plan or distribution.
History: L. 1931, ch. 226, § 4; L. 1939, ch. 227, § 3; L. 1947, ch. 310, § 1; L. 1957, ch. 316, § 1; L. 1959, ch. 236, § 1; L. 1965, ch. 341, § 2; L. 1973, ch. 219, § 3; L. 1988, ch. 356, § 168; L. 1995, ch. 9, § 2; July 1.
Law Review and Bar Journal References:
Subsection (C), ¶ (c) explained in 1957-59 survey of Kansas law, William R. Scott, 8 K.L.R. 324, 332 (1959).
Act's effect on lessee's duties, 2 W.L.J. 258, 262 (1963).
1963-65 survey of oil and gas law, Edward Larson, 14 K.L.R. 337, 340 (1965).
Paragraph (B) cited in "Secondary Recovery of Oil and Gas: Significance of Agency Approval," Robert L. Driscoll, 13 K.L.R. 481, 490 (1965).
Impact of conservation orders upon oil and gas leases, W. F. Schell, 34 J.B.A.K. 181, 182, 183, 231, 233, 234 (1965).
Subsections (C) and (D); compulsory pooling and unitization, James M. Whittier, 15 K.L.R. 307, 312, 314, 317 (1967).
"Developing the Unexplored Deep Horizons Act," Terry Torline, 26 W.L.J. 471, 492 (1987).
CASE ANNOTATIONS
1. Well owner not drilling validating well not entitled to increased allowable; commission's order denying increase in allowable production valid; "validating" wells. Continental Investment Corp. v. State Corporation Comm., 156 Kan. 858, 859, 137 P.2d 166.
2. Purpose of act stated; power of commission; unlawful production; overage chargeable for excess production. Bennett v. Corporation Commission, 157 Kan. 589, 595, 600, 142 P.2d 810.
3. Commission may fix state-wide minimum allowable production exceeding 15 barrels per well, when; statute construed. Aylward Production Corp. v. Corporation Commission, 162 Kan. 428, 429, 430, 433, 435, 436, 437, 442, 443, 444, 176 P.2d 861.
4. Purpose of act; proration defined; implied covenants of oil lease not affected by commission's orders; proration does not affect lessor's duty to drill wells to prevent drainage. Renner v. Monsanto Chemical Co., 187 Kan. 158, 161, 169, 170, 354 P.2d 326.
5. 1939 act and corporation commission's order thereunder held valid; due process; equal protection. Bay Petroleum Corporation v. Corporation Commission, 36 F. Supp. 66, 67, 71.
6. Commission may charge against future allowables prior excess production; commission's allowable order presumed to be valid in collateral proceeding. State Corporation Commission of Kansas v. Wall, 113 F.2d 877, 878, 879, 880, 881.
7. Jurisdiction of corporation commission; sale of part of interstate pipe line; requiring oil company to continue to buy oil. Sinclair Pipe Line Company v. Snyder, 147 F. Supp. 632, 635, 636, 638.
8. Mentioned; corporation commission empowered to make and enforce rules, regulations and orders to make act effective. Cities Service Gas Co. v. State Corporation Commission, 192 Kan. 707, 711, 714, 391 P.2d 74.
9. K.A.R. 82-2-125 reasonable; denial of exemption not arbitrary; neither rule nor denial violated due process. Hartman v. State Corporation Commission, 215 Kan. 758, 768, 774, 529 P.2d 134.
10. Production of oil and gas regulated by legislature; KCC rulemaking authority permits prevention of waste. Robert-Gay Energy Enterprises, Inc. v. Kansas Corporation Comm'n, 235 Kan. 951, 956, 685 P.2d 299 (1984).
11. Kansas has own elaborate review system for dealing with geological complexities of oil and gas fields. Robert-Gay Energy v. State Corp. Com'n of Kansas, 753 F.2d 857, 860 (1985).