The link shows proposed amendments to the RRC commingling rules. The comments filed by NARO-Texas are shown below. If you agree, please contact the RRC Commissioners and tell them you support the NARO comments. Link to rule amendments
Dear Commissioners:
As President of the National Association of Royalty Owners, Texas Chapter (“NARO-Texas”), NARO-Texas has the following comments and objections to the proposed amendments to Rules 3.25, 3.26 and 3.27 TAC:
CLARIFYING NOT ONE TIME MEASUREMENT
Although probably the intent of the amendment to 3.26(b)(1), NARO-Texas believes (b)(1) could be clearer that a one time measurement of production DOES NOT suffice, by adding at the end – “…reservoir, and continues to measure it separately thereafter; or…”
CLARIFYING TO BE ABLE TO TELL WHEN PRODUCTION STOPS ON ONE LEASE
NARO-Texas believes 3.26(b)(2) should be clarified that a royalty owner should have some mechanism for determining when production on one lease has stopped, even when the two tracts have identical working and royalty interest owners by means of metering or an annual well test. The suggested language is:
‘…percentages, provided there are separate meters, an annual well test, or other means where it can be determined if production on one lease has ceased.”
CLARIFY CANNOT CORRECT COMMINGLING THAT HAS VIOLATED PERMITS
NARO-Texas has concerns that the new 3.26(f) could be used to correct permits where commingling has occurred contrary to a permit and no notice would be given. The RRC should not take on the burden of divining if each form correction is to cover up a commingling violation. The proposed revision is:
“”…Commission, provided such correction may not be made to amend any prior commingling permit granted.”
FIELD RULES SHOULD NOT BE A BACK DOOR FOR COMMINGLING
NARO-Texas has serious concern about proposed 3.26(g) as a mechanism for future field rule amendments that would allow commingling without going through this notice process. We understand there are some old filed rules that address commingling, so the correction would be fairly simple:
“…shall continue to comply with any existing field rules as of January __, 2019 regarding…”
We appreciate the Commissions’ time and consideration of these comments. NARO-Texas was not invited to participate in the formulation of the proposed amendments, or we would have gotten these comments to the Commission earlier. NARO-Texas does understand the need for many of the updates in the proposed amendments.
Sincerely,
Wade Caldwell, President NARO-Texas