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55-603. Production regulated; prevention of unreasonable discrimination. Whenever the full production from any common source of supply, herein called "pool", of crude oil in this state can be obtained only under conditions (a) constituting waste as defined by K.S.A. 55-602 and amendments thereto, or (b) independently of waste, under conditions injurious to the respective correlative rights of the producers in the pool, or (c) under conditions unreasonably discriminating against other pools in the state, any person having the right to drill into and produce oil from the pool may take currently no more than that proportion of all crude oil which may be produced from the pool currently without such waste, injury or discrimination, which the productivity of such person's well or wells, considered in connection with the acreage reasonably attributable to each such well, bears to the productivity of all the wells in the pool, considered in connection with the acreage reasonably attributable to each well in the pool. The state corporation commission is authorized, and it shall be its duty, to regulate the taking of crude oil from any pool within the state of Kansas as to prevent waste in the pool or, independently of waste, to prevent the inequitable or unfair taking of crude oil from the pool by any person and to prevent unreasonable discrimination therein. The commission is further authorized, and it shall be its duty, to prevent unreasonable discrimination in favor of any one pool as against any other pool or pools in this state in the allocation of allowable production among such pools.

History: L. 1931, ch. 226, § 3; L. 1939, ch. 227, § 2; L. 1957, ch. 315, § 1; L. 1965, ch. 341, § 1; L. 1988, ch. 356, § 167; L. 1995, ch. 9, § 1; July 1.

Law Review and Bar Journal References:

Cited in discussion of cases, H. H. Lesar, 6 J.B.A.K. 149, 153 n. 30 (1937).

1963-65 survey of oil and gas law, Edward Larson, 14 K.L.R. 337, 340 (1965).

"Covenants for Exploration in Oil and Gas Leases," Stephen F. Williams, 27 K.L.R. 443, 453 (1979).

"Oil and Gas: The Corporation Commission's Role in Evaluating the Prudence of Operations in Statutory Unitization," Richard A. Forster, 24 W.L.J. 191 (1984).

"Survey of Kansas Oil and Gas Law (1988-1992)," Phillip E. DeLaTorre, 41 K.L.R. 691, 722 (1993).

CASE ANNOTATIONS

1. Commission's order denying increase in allowable production valid; "validating" wells. Continental Investment Corp. v. State Corporation Comm., 156 K. 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 K. 589, 594, 598, 600, 142 P.2d 810.

3. Oil lease; wartime regulations prevented drilling; extension of lease denied. Berline v. Waldschmidt, 159 K. 585, 589, 156 P.2d 865.

4. Commission may fix state-wide minimum allowable production exceeding 15 barrels per well, when; statute construed. Aylward Production Corp. v. Corporation Commission, 162 K. 428, 429, 430, 433, 434, 435, 442, 443, 444, 176 P.2d 861.

5. Mentioned; implied covenant to fully develop leased premises during primary term of lease, when. Berry v. Wondra, 173 K. 273, 288, 246 P.2d 282.

6. Act cited and construction thereof discussed in construing Natural Gas Act (55-703 et seq.); (dissenting opinion). Northern Natural Gas Co. v. State Corporation Commission, 188 K. 355, 367, 368, 362 P.2d 599. Rehearing denied. 188 K. 624, 364 P.2d 668.

7. 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.

8. 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.

9. 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, 638.

10. 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).

11. Cited; KCC order amending basic proration order for Kansas Hugoton gas field to allow infill drilling examined. Southwest Kan. Royalty Owners Ass'n v. Kansas Corporation Comm'n, 244 K. 157, 184, 769 P.2d 1 (1989).


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