§ 34-60-117 — Prevention of waste - protection of correlative rights

Colorado § 34-60-117

• Jurisdiction: Colorado
• Title 34: Mineral
• Art.: Energy and Carbon Management

Text

(1) The
commission has authority to prevent waste and protect correlative rights of all
owners in every field or pool, and when necessary shall limit the production of oil
and gas in any field or pool in the exercise of this authority.

(2) If the commission limits the total amount of oil or gas which may be
produced in any pool in this state to an amount less than that amount which the
pool could produce if no restriction were imposed, the commission shall allocate or
distribute the allowable production among the several wells or producing
properties in the pool on a reasonable basis, preventing or minimizing reasonably
avoidable drainage, so that each property will have the opportunity to produce or to
receive its just and equitable share, subject to the reasonable necessities for the
prevention of waste.

(3) The commission shall give due regard to the fact that gas produced from
oil pools is to be regulated and restricted in a manner as will protect the reasonable
use of its energy for oil production.

(4) Each person purchasing or taking for transportation oil or gas from any
owner or producer shall purchase or take ratably, without discrimination in favor of
any owner or producer over any other owner or producer in the same common
source of supply offering to sell his oil or gas produced therefrom to such person. If
two or more persons purchase or take for transportation oil or gas from any
common source of supply in quantities such that any tract of land of separate
ownership is not producing its just and equitable share from the pool, the person
purchasing or taking from the tract producing more than its just and equitable
share shall, upon the proper offer to sell being made, reduce the amount purchased
or taken from such tract and purchase from each tract not producing its just and
equitable share so that each tract of land may produce its just and equitable share
of production from the pool. In the event that any such purchaser or person taking
oil or gas for transportation is likewise a producer or owner, he is prohibited from
discriminating in favor of his own production or storage, or production or storage in
which he may be interested, and his own production and storage shall be treated as
that of any other producer or owner; but no owner or producer, who is also a
purchaser of oil and gas, or who has a market for his oil and gas or either thereof,
has the right to invoke the benefits of this section.

Legislative History

Source: L. 51: p. 655, � 7. CSA: C. 118, � 68(7). L. 52: p. 131, � 4. CRS 53: � 100-6-6. L. 55: p. 650, � 3. C.R.S. 1963: � 100-6-6.