Directive 065: Resources Applications for Oil and Gas Reservoirs ...

3.6 Application to Amend or Rescind a Gas Allowable Order
3.6.1 Background
There are essentially three situations when the ERCB may issue a gas allowable (GA) order
for the purpose of setting the maximum allowed gas production rate for a gas well or wells in
a pool:
• if the ultimate recovery of gas may be adversely affected by unrestricted production rates
(Section 10.300(1) of the Oil and Gas Conservation Regulations [OGCR]),
• if a gas well is completed outside of its prescribed target area and it is necessary to apply
an off-target penalty to the well’s base allowable for equity reasons (Section 4.070(1) of
the OGCR, ERCB Interim Directives (ID) 94-2 and 94-5), and
• if the Board has deemed a fractional tract of land to be a drilling spacing unit and there is
a need to apply an area-ratio production penalty or off-target penalty for equity reasons
(Section 4.050(1) of the OGCR).
Section 10.095 of the OGCR designates that the base allowable for a gas well shall be its
maximum daily allowable (Q max ). The calculation of Q max is explained in Section 10.300(1)(c)
of the OGCR and in ERCB Informational Letter (IL) 85-10. In all instances above, the
penalties are applied against the well’s Q max and an annual allowable (based on this Q max and
the number of days in the year) is assigned.
3.6.2 When to Make This Application
When a well is subject to an ERCB gas allowable (GA) order and the well’s licensee believes
that circumstances warrant the allowable being rescinded or amended, an application can be
made to change the allowable in accordance with Section 10.300(4) of the OGCR. There are a
number of reasons for a change to a gas well’s allowable, including
• equity (e.g., there is no longer an offsetting productive well),
• conservation (e.g., there is no longer a reason to restrict the rate for conservation
reasons),
• pool delineation (e.g., data support a new pool interpretation that does not warrant the
application of a gas allowable to the well), or
• administrative (e.g., the well can no longer meet the allowable).
The original reason for the initial assignment of the allowable will dictate the basis for any
requested change, and the application must address what has changed since the original
allowable was assigned to the well to justify the application. The majority of gas allowables
are assigned for equity purposes, resulting in equity matters being of primary consideration in
most applications to amend or rescind a GA order.
3-38 • ERCB Directive 065: Resources Applications / Gas Allowable (October 2011)