Oklahoma Corporation Commissioners will hold an August 20 hearing into their annual decision regarding the statewide proration formula for unallocated gas wells for the period of October 1, 2025 through September 30, 2026.
The agency’s Oil & Gas Conservation Division has recommended the formula should be set at the greater of 75% of the
wellhead calculated absolute open flow potential or a rate of 3,000 MCF/Day. The recommendation was from the Production/Proration staff.
wellhead calculated absolute open flow potential or a rate of 3,000 MCF/Day. The recommendation was from the Production/Proration staff.
“An analysis of gas wells shows a similar situation to previous proration periods. Counting multiunit wells separately on a per-unit basis, there were an estimated 65 units in the state that averaged 3,000 MCF/d or more on an annual basis in 2024,” according to the recommendation on file with the Corporation Commission.
Unallocated gas wells are those that have not been assigned to a specific owner or operator and lack specific production agreements. As defined, such wells can pose regulatory challenges and require oversight from state authorities. Their status can have an impact on local economies and energy markets.
The staff report indicated that the annual count of such wells “has dropped drastically” since the minimum allowable was raised to 3,000 Mcf/d, down from several hundred in prior years to well under 100 in 2024.”
The staff urged the commisson to maintain the 75% of AOF (absolute open flow) and explained the 3,000 Mcf/d rate “reflects higher levels than what most wells have actually produced.”
The recommendation further claimed that “the greater issue at hand is that the lowering of this formula not only will not solve supply/demand or other economic issues from a larger perspective, but rather, it will stoke fears of regulatory instability and potentially cause disincentives to invest within the state, ultimately having an adverse effect on Oklahoma’s national market share.”
Only one public comment is on file in the case and as OK Energy Today reported earlier, it was made by Ovintiv Inc. based in Denver, Colorado. The company said it supports the current rate.