(a) All natural gas, except casinghead gas, produced
from wells shall be measured, with each completion being measured
separately, before the gas leaves the lease, and the producer shall
report the volume produced from each completion to the commission.
For commission purposes, the measurement requirements of this section
are satisfied by the use of coriolis or turbine meters or any other
measurement device or technology that conforms to standards established,
as of the time of installation, by the American Petroleum Institute
(API) or the American Gas Association (AGA) for measuring oil or gas,
as applicable, or approved by the Director of the Oil and Gas Division
as an accurate measurement technology. Exceptions to this provision
may be granted by the commission upon written application.
(b) All casinghead gas sold, processed for its gasoline
content, used in a field other than that in which it is produced,
or used in cycling or repressuring operations, shall be measured before
the gas leaves the lease, and the producer shall report the volume
produced to the commission. Exceptions to this provision may be granted
by the commission upon written application.
(c) All casinghead gas produced in this state which
is not covered by the provisions of subsection (b) of this section,
shall be measured before the gas leaves the lease, is used as fuel,
or is released into the air, based on its use or on periodic tests,
and reported to the commission by the producer. The volume of casinghead
gas produced by wells exempt from gas/oil ratio surveys must be estimated,
based on general knowledge of the characteristics of the wells. Exceptions
to this provision may be granted by the commission upon written application.
(d) Releases and production of gas at a volume or daily
flow rate, commonly referred to as "too small to measure" (TSTM),
which, due to minute quantity, cannot be accurately determined or
for which a determination of gas volume is not reasonably practical
using routine oil and gas industry methods, practices, and techniques
are exempt from compliance with this rule and are not required to
be reported to the commission or charged against lease allowable production.
(e) In order to prevent waste, to promote conservation
or to protect correlative rights, the commission may approve surface
commingling of gas or oil and gas described in subsections (a), (b)
or (c) of this section and produced from two or more tracts of land
producing from the same commission-designated reservoir or from one
or more tracts of land producing from different commission-designated
reservoirs in accordance with §3.26(b) of this title (relating
to Separating Devices, Tanks, and Surface Commingling of Oil).
(f) In reporting gas well production, the full-well
stream gas shall be reported and charged against each gas well for
allowable purposes. All gas produced, including all gas used on the
lease or released into the air, must be reported regardless of its
(g) If gas is produced from a lease or other property
covered by the coastal or inland waters of the state, the gas produced
may, at the option of the operator, be measured on a shore or at a
point removed from the lease or other property from which it was produced.
(h) All natural hydrocarbon gas produced and utilized
from wells completed in geothermal resource reservoirs shall be measured
and allocated to each individual lease based on semiannual tests conducted
on full well stream lease production.
(i) For purposes of this rule, "measured" shall mean
a determination of gas volume in accordance with this rule and other
rules of the commission, including accurate estimates of unmetered
gas volumes released into the air or used as fuel.
(j) No meter or meter run used for measuring gas as
required by this rule shall be equipped with a manifold which will
allow gas flow to be diverted or bypassed around the metering element
in any manner unless it is of the type listed in paragraphs (1) or
(2) of this subsection:
(1) double chambered orifice meter fittings with proper
meter manifolding to allow equalized pressure across the meter during
(2) double chambered or single chambered orifice meter
fittings equipped with proper meter manifolding or other types of
metering devices accompanied by one of the following types of meter
(A) a manifold with block valves on each end of the
meter run and a single block valve in the manifold complete with provisions
to seal and a continuously maintained seal record;
(B) an inspection manifold having block valves at each
end of the meter run and two block valves in the manifold with a bleeder
between the two and with one valve equipped with provisions to seal
and continuously maintained seal records;
(C) a manifold equipped with block valves at each end
of the meter run and one or more block valves in the manifold, when
accompanied by a documented waiver from the owner or owners of at
least 60% of the royalty interest and the owner or owners of at least
60% of the working interest of the lease from which the gas is produced.
(k) Whenever sealing procedures are used to provide
security in the meter inspection manifold systems, the seal records
shall be maintained for at least three years at an appropriate office
and made available for Railroad Commission inspection during normal
working hours. At any time a seal is broken or replaced, a notation
will be made on the orifice meter chart along with graphic representation
of estimated gas flow during the time the meter is out of service.
(l) All meter requirements apply to all meters which
are used to measure lease production, including sales meters if sales
meter volumes are allocated back to individual leases.
(m) The commission may grant an exception to measurement
requirements under subsections (a), (b) and (c) of this section if
the requirements of this subsection are met. An exception granted
under this subsection will be revoked if the most recent well test
or production reported to the commission reflects a production rate
of more than 20 MCF of gas per day or if any of the other requirements
for an exception under this subsection are no longer satisfied. An
applicant seeking an exception under this subsection must file an
(1) the most recent production test reported to the
commission demonstrates that the gas well or oil lease for which an
exception is sought produces at a rate of no more than 20 MCF of gas
(2) an annual test of the production of the gas well
or oil lease provides an accurate estimate of the daily rate of gas
(3) the flow rate established in paragraph (2) of this
subsection multiplied by the recorded duration determined by any device
or means that accurately records the duration of production each month
yields an accurate estimate of monthly production; and
(4) the operator of the pipeline connected to the gas
well or oil lease concurs in writing with the application.
(n) Failure to comply with the provisions of this rule
will result in severance of the producing well, lease, facility, or
gas pipeline or in other appropriate enforcement proceeding.
Source Note: The provisions of this §3.27 adopted to be effective January 1, 1976; amended to be effective April 12, 1983, 8 TexReg 1019; amended to be effective March 10, 1986, 11 TexReg 901; amended to be effective June 23, 1997, 22 TexReg 5747; amended to be effective April 28, 2015, 40 TexReg 2275