After taking comments from producers last week on a proposed plan to continue with a 50% gas prorationing rate, the Oklahoma Corporation Commissioners might vote on the proposal during a Wednesday regular meeting.
The issue is on the agenda that includes a possible vote on whether to keep the rate the same level as approved by commissioners in March of 2020. The recommendation from Duncan Woodliff, Manager of Production and Proration for the commission’s Oil and Gas Conservation Division would take effect Oct. 1 and continue for six months, if approved.
As OK Energy Today reported last week, the commission listened to companies and groups that either supported the continued prorationing or were against it.
Devon Energy urged the commission to return to a 100% calculated absolute open flow and was against the commission “trying to intervene in the markets.”
The American Petroleum Institute urged the Commission to reverse its 50% decision claiming, “the market has already responded, generating relatively stronger Oklahoma natural gas prices but not necessarily due to proration, so proration is unnecessary.”
Marathon Oil also supported the 100% proration rate. Ovintiv Services was also against the continued 50% proration.
“The OCC’s gas proration policy serves as a significant hurdle to future investment in gas wells in Oklahoma,” wrote Matthew R. Vezza, Ovintiv’s Vice President and General Manager of the Anadarko and Rockies Operating areas.
Continental Resources favored the continued 50% proration.
“Even though we have seen additional pipeline takeaway capacity come on line, the gas market that Oklahoma produces into remains oversupplied due to the lasting effects of a warm winter and COVID-19 related global demand destruction,” stated the company. “Now is not the time to reverse course from disciplined gas production.”
The meeting starts at 9:30 a.m. and will again be a remote session due to the COVID-19 pandemic. The agenda stated that the commissioners will each participate remotely but could also change their minds to physically be in the courtroom.
