§ 38-08-06 — Commission shall determine market demand and regulate the amount of production

production.
The commission shall determine market demand for each marketing district and regulate
the amount of production as follows:
1. The commission shall limit the production of oil and gas within each marketing district
to that amount which can be produced without waste, and which does not exceed the
reasonable market demand.
2. Whenever the commission limits the total amount of oil or gas which may be produced
in the state or a marketing district, the commission shall allocate or distribute the
allowable production among the pools therein on a reasonable basis, giving, where
reasonable under the circumstances to each pool with small wells of settled
production, an allowable production which prevents the general premature
abandonment of such wells in the pool.

3. Whenever 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 was imposed, which limitation is imposed either incidental to,
or without, a limitation of the total amount of oil or gas produced in the marketing
district wherein the pool is located, 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 reasonable 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.
4. In allocating the market demand for gas as between pools within marketing districts,
the commission shall give due regard to the fact that gas produced from oil pools is to
be regulated in a manner as will protect the reasonable use of its energy for oil
production.
5. The commission is not required to determine the reasonable market demand
applicable to any single pool, except in relation to all other pools within the same
marketing district, and in relation to the demand applicable to the marketing district. In
allocating allowables to pools, the commission may consider, but is not bound by,
nominations of purchasers to purchase from particular fields, pools, or portions
thereof. The commission shall allocate the total allowable for the state in such manner
as prevents undue discrimination between marketing districts, fields, pools, or portions
thereof resulting from selective buying or nomination by purchasers.