108 PRODUCTION PRACTICE AND TECHNOLOGY

"MER"-A HISTORY I.

ABSTRACT

The history of the developn~ent of the concept of MER IS reviewed pr~nc~pally insofar as the contr~butions of various API comm~ttees are ~n'olved. The present' use of "n~aximu~n efficient rate" 1s described, as well

The current Interest In MER, and ~ t s use In estab- l ~ s h ~ n g allowables In two states, war ran t a r e n e w of the developments whlch have contnbuted to the present concept~ons of tha t term by the petroleum industry

The overproduction which followed the d~scovery of Sen~~nole , Oklahon~a, Hendricks and Yates, Texas, In 1927, Oklahonla City, Oklahoma, Hobbs, New M e m o . deep sands a t Santa F e Springs and Long Beach, Call- f o r n ~ a , In 1928, and E a s t Texas 11.1 1931, resulted In many res t r~c ted or shut-ln wells and fields A t first pipe-l~ne 01% market outlet determlned each operator's opportumty to d~spose of his oil Then came plpe-line proration and, finally, s ta te regulated proration a s we know ~ t .

During 1929 the practice of tubing new wells to con- serve gas energy was greatly stimulated'" We fre- quently forget t h a t t h ~ s now un~versa l procedure has had important effects on r a t e s of production

I t was soon recogn~zed tha t restricted production

as some of the c o r ~ f u s ~ o ~ ~ III definition whtch IS prevalent. The d~sagreement cortcernlrlg leg~tin~ate future use of MER'S is br~efly intl~cated.

croachment of water The same author recomnlends production a t such a v a t e a s t o result in a nllnimum gas-oil r a t i c r i n order to conserve gas Thls same papel first nlent~ons the posslbil~ty of res t r~c t lng pro- ductlon to r a t e s which will deplete a field In about 20 to 25 years This, in effect, suggests the use of reserves a s a factor in allocation, but, to thls writer's knowl- edge, reserves have nowhere been directly used In a n inter-pool p rora t~on formula o r plan

A progress report dated 1938 dealt largely wlth well spacing under restricted product~on, bu t IS ~n te res t lng because of suggestions made by both legal and tech- nical cornm~ttees w ~ t h reference t o r a t e of production.

The Legal Subcoinmittee on Well Spacing, in the report t ~ t l e d "Legal Phases of Well Spacing," sug- gests to regulatory bod~es and conservation agencies, among other things, to "fix a top allowable f o r each field a t such a point t h a t physlcal waste wlll be avoided and the reasonable market demand will not be exceeded "

I n a companion report by the Special Study Com- mittee on Well Spacing, "Englneering and Economic

under proratron was affect~ng reservoirs in various I Phases of Well Spacing," the following statements a r e ways, and to understand these effects better and t h e ~ r pertinent to this revlew

- .

ultimate economlc inferences, petroleum engineers and geologists ~n tens~f ied their studles of the types of con- trolling drlves, pressure behavlor, res~dua l sa tura t~on , etc Thus the reservoir engineer was created!

Studies of reservoir performance under restricted flow led to the enumeration of factors involved In ob- t a ~ n ~ n g maximum ultimate recovery

I n 1933 a Topical Committee on Allocation of Pro- duction was appointed by the Central Committee on Drllllng and Production Practlce of the D~vlsion of

Under recommended procedures "The production In all pools should be controlled, o r sufficiently cur- tailed, to prevent the loss o r wastage of a n y native reservoir energy inherent in the oil, gas, and water This w ~ l l . . approach the max~lnum ultimate re- covery of oil from the pool I t is recommendei the inaxinlunl ra te of a pool's production be specified

Under El~lgineering Pr lnc~ples In Production of Reservo~r I t is generally agreed t h a t the maxlmurn vute a t whlch a pool can be pvduced efficiently and econom~cally can be determlned (Here 1s one of the first definite statements using' "maxlmum r a t e of

progress repor t2 coverlng 1933 and 1934 is largely a study of, and expression of oplnion on, factors lnvolved In f a x proration between wells and t racts within a pool To a lesser extent, factors whlch would Insure "max~mum econoinlc recovery" were d~scussed

Gertnalne to our subject a r e d~scuss~ons by T V Moore In thls early progress report of control of pro- duct~on ra te to prevent premature and uneven en-

Production of the Alnerlcan Petroleum Institute A

* The Btlnntlc Refining Co , Dnllns. Trxns ? Presented n t Twenty-seventh Annnnl h leet~ng. Cli~cngo. I l l ,

Noy 11. 1947. presiding. Jolrn E Sl!crkorne, U I I I O ~ 011 Co of Cnliformn. R'llittlrr, Ca l i f , a n d R U Garret t , Arknnsns Fuel 011 Co . S l ~ r c r c l ~ o r t . Ln

Flgures rt.ft.r t o REFERENCES on 1, 110

I efficient production" In the literature ) I n May 1941 the same A P I technical committee, now

renamed "Specla1 Study Committee on Well S p a c ~ n g and Allocation of Production," Issued another progress report ' Slgnlficant por t~ons of t h a t report a r e quoted because they a r e ~ m p o r t a n t m t h e development of t h e Idea of a myage of r a t e s In efficient production. I n hstlng criteria used In measuring operating efficiency, "quantity and r a t e of oil production" were mentioned first A rather full discussion of the importance of restriction In ra te is followed by t h ~ s paragraph

"The slgnlficant p a r t In the foregoing is einbodled In the vlew tha t all fields wlll produce effic~ently ~f

restricted w ~ t h ~ n a proper range of produc~llg rates Although t h ~ s range may be w~$e , wlth l ~ t t l e o r no var la t~on In effic~ency of extract~on, nevertheless, ~t should be a factor wherever determinable"

In summing u p factors whlch may be properly used in allocation between states, areas, and pools, the com- mlttee hsts, among others, "range of eficzent rates of product~on " Italics a r e the wrlter's

' A progress report Issued by thls same A P I com- lnlttee In 1942, and published In book form, has been widely c~rculated Thls report enlarged upon t h a t of the previous year Under conclus~ons," ~ t e l n No 3, 1s "Product~on ra te IS one of the most Important factors governing 011 recovery, and productlon a t excessive rates con~monly causes waste "

Under the head~ng , "Principles Apphcable to Allo- cation among Pools,? Item No 2 is of ~ n t e r e s t " Pools should be restricted a t least to rates w h ~ c h w ~ l l p e r m ~ t the use of the ~r~ost-efic~elzt produczn.g lwactzces "

Much of the lna te r~a l under "D," "Restnction to Prevent Waste,"' is d~rec t ly -related t o the present discuss~on, and 1s repeated verbatim "Productlon ra te 1s the most Important controllable factor In the pre- ven t~on of waste, and no pool should be allowed to produce a t so hlgh a rate a s to cause waste It has been argued that there is a n op t~munl production r a t e a t whlch each field will produce a maslmum amount of 011 I t is doubtful t h a t thls is t rue I n any case, englneer- ing skill has not yet developed sufficiehtly to p e r m ~ t the determlnatlon of the op t~mum r a t e wlth the accu- racy required for allocat~on purposes It 1s t rue t h a t a rate can be determined, f o r most fields, a t w h ~ c h waste would occur due to a n excess~ve product~on ra te , but there 1s a wlde range of rates In w h ~ c h effic~ent operation 1s poss~ble, and w ~ t h ~ n t h ~ s range ~t is not posslble to select the exact point of maxllnum recovery, even ~f such a polnt e x ~ s t s F o r example, it may be shown that; fo r a certaln field, product~on In excess of 100,000 bbl dally will result in waste, but ~t 1s doubtful tha t conclusive proof could be offered a s to whether a rate of 40,000 bbl daily would yield more 011 ultnnately than a ra te of 60,000 bbl dally

"Each field should be produced a t a ra te not to exceed t h a t m h ~ c h would bring the field u p t o the threshold of waste If t h ~ s rate 1s more than the field's fa i r share of the reasonable market demand, the ra te should be reduced to tha t w h ~ c h would perinit the field t o produce only' I ~ S f a l r share"

Thioughout thls period there had been prevalent w ~ t h l n the industry the idea tha t there mlght be a n optlnluln ra te f o r each reservoir, i e l a slngle and unlque production ra te which would Insure maxllnuln effic~ency and u l t~ ina te recovery The quoted para- graphs of progress reports made by techn~cal groups show how the concept of a range of effic~ent rates crystallized I t is only a short step from that concept to the conslderat~on of the maximum of t h a t 'angel hence, ~ncrx~nzxnz efficient rate, o r "MER "

Use of MER In 1942 the ~etl!oleum Adininlstrat~on for War and

the Product~on Coinm~ttee fo r D i s t r ~ c t V adopted

"maxnnum efficient rate" f o r use In ~nter-pool alloca- t ~ o n In C a h f o r n ~ a The engineering subcolnlnlttee appo~nted-lacklng any guidance-adopted the follow- ing tentative definlt~on

"The maximum efficient ra te for a n 011 pool 1s defined a s the highest dally r a t e of product~on t h a t can be sus ta~ned by a field o r pool for a p e r ~ o d of slx ~ n o n t h s ~v i thout jeopardizing maximum pract~cable ultlnlate recovery fl-om the reservolr "

Although first used a s cezltt~g rates, la ter usage was a s a proportion~ng factor In allocation between pools of the s tate A t the present time pools a r e classified 111 various categories and, dependent on such class~fi- ca t~on , a r e In some cases allocated on the basls of MER lo

During the w a r the Subcommittee on Reserves and Developn~ent of PAW Productlon Comm~ttee, District 111, conlmonly called the "Ivy con~nnttee," established MER's f o r Texas fields, and these were used by the Texas R a ~ l r o a d Comln~ss~on In ~ n a k ~ n g allocations How the Ivy comm~ttee arrived a t ~ t s estimates of lnaxlmum efficlent ra te is "restr~cted" ~ n f o r m a t ~ o n . I t s personnel of emmeat engineers and geologists, supplied with all posslble reservolr ~nformation, un- doubtedly had most ~n te res t lng sessions Thelr com- bined judgment probably obviated the need of a rlgorous definltlon

As yet there 1s no such commonly accepted definl- tlon T h ~ s 1s easy to understand when it is renlem- bered t h a t no simple slngle sentence defin~tlon could adequately Include all the manlfold factors and con- no ta t~ons ~nvolved "Maxlmum effic~ent rate" 1s en- t w ~ n e d In reservolr behav~or whlch, III turn, depends 011 individual well behavlor and the methods used In coinpleting wells, the character~st ic of the reservolr fluids, type of d r ~ v e , spaclng of wells, etc

Less understandable or excusable, but nevertheless prevalent, is the confusion concerning the meanlng of the lnltials MER Such interpretations a s m.ost efficient rate,u nLL)rznz.zL?tL effic~ent rate, maximum eficzel~ey ra te a r e corrupt~ons of the intended meaning Sustained effic~ent rate and opt~inuin efficient rate have only added to the confusion

Suggested a s clar~fication have been "maximum ra te of efficient product~on" or "max~inum ra te of efficlent and economic product~on." These Inore clearly reflect the concept developed through the years, a s illustrated in previous paragraphs

The Texas Railroad Connn~sslon is now askmg f o r test~mony upon which to base MER's fo r Texas fields Such testimony y ~ e l d s w~dely ranglng values, 1nd1- catlng t h a t a n accurate engineering determlnat~on of MER 1s not yet universally ava~lable to the ~ n d u s t r y

This certainly is not surprising The determinat~on of MER, a s or~glnal ly conceived, depends on the method of reservoir product~on Frequently ~t 1s a sumnlat~on of efficient well ra tes based on proper productlon prac- tice fo r the type of colnpletlon used Involved, too, a re r e l a t ~ v e prices of oil and gas a s ~ve l l a s the actual market prlce, operating costs, and whether u n ~ t ~ z a t i o n and/or pressure maintenance a r e 1x1 effect Further- more, a n y determination of MER would be valid fo r a

110 PRODUCTION PRACTICE AND TECHNOLOGY I

short t ~ m e only The s ta te of depletion, the type of drive which has become operat~ve, the number of wells, the change In the percentage of the varlous reservolr f lu~ds produced-all require per~odic revlews, and result In a n everchanglng MER All of the sclence and a r t known a s "reservolr eng~neering" IS ~nvolved i n the d e t e r m ~ n a t ~ o n of MER I t s determination IS not only current, but recurrent

Future Use

There IS d~sagreelnent among engineers and spec~al- ~ s t s concerning the proper use of MER's, even on the assumption tha t they can be accurately determined f o r each field for a specific time Interval

Many believe t h a t MER's should be used only a s celllngs w h ~ c h should not be exceeded In allocating productlon except In case of emergency such as w a r Below t h a t ceil~ng, such recommended factors a s acre- feet, depth, market demand, etc (see Standards of Allocc~tzon 9 should determine allocat~on

Others believe MER's can legitimately be used a s a proport~onmg factor In the dls t r lbut~on of allocations, much a's has been done In C a h f o r n ~ a

As long a s demand IS h ~ g h and restr ic t~on not strln- gent, no grea t violence IS done to either theory, Inas- much a s fields will produce elther t o c a p a c ~ t y or close to them MER I f severe restr ic t~on should again become necessary and fields should be prorated In some proportion to thew MER, then undoubtedly many wlll questlon and object to such use

Thus f a r ~h only the two states, California and Texas, has recognition been glven t o MER a s such Many other states with conservat~on and regulatory bodies analyze testlnlony and other collected data before settlng pool rates, In order to avold productlon a t excesslve rates Thls IS t rue of such states a s Arkansas, Kansas, Okla- homa, and others

Where operators through engineering coinnnttees o r field associat~ons determine pool rates In states w h ~ c h have no comprehensive conservation law, they a r e now commonly uslng the reservoir englneer~ng ~ndicated previously herein a s necessary In the d e t e r m ~ n a t ~ o n of MER Thls IS so a t Rangely, Colorado, and Elk Basln, Wyom~ng, a s well a s in many other pools.

Secretary of the Interlor Krug, in a n address to the Amencan Petroleuln I n s t ~ t u t e In Chlcago, March 1946, ind~cated hls department's interest In MER In such statements as-

"It IS particularly ~ lnpor tan t f rom a securlty view- point to know the maxz?n?Lm eficzent productzve capaczty of the 011 wells and fields now In operation", and

"The natlonal es t~mates of our ~ n a x ~ m u l n efficient product~on capacity stopped wlth V-J day, but they should be cont~nued, Valuable a s has been the estimate of proved oil reserves . . ~t tells only p a r t of the story It tells how much 011 we may have In proved underground reserves, but ~t does not tell u s the nzaxzmz~m rate a t which tha t oil can be produced effic~ently. The annual 011 ~nventory should be broad-

ened to Include yearly es t~mates of our eficzent 'pro - d u c t ~ v e capaa ty "

Such polnted p r o m p t ~ n g by a federal agency may result In all 011-produc~ng states adoptlng fact-find~ng procedures w h ~ c h would yield ~nfornlation on MER of pools wlthin thew respective boundar~es The value of such summations wlll be dlrectly proport~onal to t h e vahdlty of the ~ n d l v ~ d u a l estlnlates of each pool's MER

ACKNOWLEDGMENT

Past and present members of the A P I Specla1 Study Cornnuttee on Allocation of Product~on and Well Spac- lng, w ~ t h whom the author has had the pr~vl lege of serv- Ing for many years, have contributed dlrectly and In- directly to the paper here presented I t IS ~lnposslble to name each one who, by d ~ s c u s s ~ o n o r helpful comment, has asslsted 111 the accurnulat~on of ~nforlnation con- tained hereln Thanks a r e also due The Atlantlc Refin- lng Colnpany for permlsslon to publish thls paper

REFERENCES H C Al~ller. Frtiictlon of Natrtral Gas 2n thc Productron 01

017, 11 rrlrort of the U S B~lrenrl of hllnes In ccloperatlon n ~ l t h the Anierican Pe t ro l eun~ I l ~ s t ~ t r l t e , prlbllslied by the Amerlcan Petroler~m I n n t ~ t ~ ~ t e . NPW York 11929)

Esseifttnl ~ ~ t g c ~ r ~ c r t ; ~ ~ Fnctors-?,;'tire Allocatzon of Prodtrc- trolr. R r r ~ s e d Progress Report all11 S ~ e c i a l Papers by the T o p ~ c a l Committee on Allocntlon of Prorlrlct~on of tlie Centra l C o n ~ n l ~ t - tee on D r ~ l l l n n and ,P roduc t~on Practice. Ch~cago, 111, Oct 36 t 1933) : ~ n d DZl1.l~. Texas Nnr 14 11984)

Progress RCports of dIPacrrca~z Pctrolcrc i~~ I~is t i t r r te Cotnniit- tees 011 Well Spncr~rg, s~rbl i i~t te t l to B P I 8 th m~d-yea r meeting, W i c h ~ t a , Kans , RIoy (193s)

rP rogrcs s Rcport 0 t h thc S t l r t l ~ of S t a ~ i d a r d s f o r t he Alloca- t l o i ~ of 011 Prodectrot~ A I I I O I , ~ Stntcs, Areas, atid Pools, Amen- can Pe t ro l eun~ Institute, Alny (1941)

5 ~Ttflirdnrds of .4llocat1otr of 011 Prodrcctron Wathtn Pools a n d dwo11g Pools, by the Specla1 Study Colnmlttee a n d Legal Ad- vlsory Con1mltt1.e on Well Spnclng and Allocation of P r o d u c t ~ o n of the c'entml Conlrnlttee on D r l l l ~ n g and P roduc t~on Practice. A P I D~v i s ion of P ro r l r~c t~on , pnbllshed by the Amencan Petro- leum I n s t ~ t u t e (1949)

Vhrd Sect 11. p 7 TIbrd : 1, 63 8 Ibrd . D 64 e E ~ r g r ~ i e e r r ~ r g Rrrlcs G o n e r ~ ~ l f i a tire Establrshs ic~r t of Pool

Classrficatrons Afnx~mrta~ Bfflcrc~tt l ta tcs Afontklu U E R Dccllne Rates , a n d 1i;tm-poo2 Dlstrrhrctron S'c1i~drtlt.s. by Conservation Comni~t tee of C n l ~ f o r n ~ n 011 Prorlucers. J r ~ n e 96 (1946)

10 Personal communrcat~ons R E Loeck. Standarrl 011 Co of Ca l~ fo rn ia , Oct (1046) , R W French, Soh10 Oil C o , J a n (1947)

11 011 Gas J 46 [lo] 40, July 19 (1047)

DISCUSSION Don R Knowlton (Petroleum Consultant, Oklahoma

C ~ t y , Okla ) (written) Mr Kraus should be con- gratulated on preparing a very excellent paper on a subject t h a t has caused considerable confusion in the industry durlng the past few years

As Mr Kraus p o ~ n t s out, c e r t a ~ n A P I comn~ittees a s early as 1933 discussed factors Involved In o b t a ~ n ~ n g ' L m a x ~ ~ n ~ m economic recovery" from 011 reservoirs

Production ra te IS one of the ~ m p o r t a n t factors, be- cause excessive rates of withdrawal unquestionably cause waste Much cons~dera t~on was given to methods of de te rn~~nat lon of effic~ent product~on rates

When we went to w a r the Petroleum Admlnistrat~on for W a r was charged wlth the respons~blhty of deter- nlllllng how our petroleum resources could, w ~ t h mini- mum use of c r i t~ca l materials, be made available

In sufficient quantities to wln the w a r whether the wlnnlng took 2, 3, or 10 years We, in PAW, sponsored the deterinlnatlon of maxlmum efficlent rates of pro- duction from fields a s a crlterlon of how rapidly 011 could be withdrawn from exlstlng pools t o meet the presslng current needs wlthout dangerously sacrlficlng productive capaclty tha t might be just a s urgently needed 111 la ter years before the war had ended

Before and during the w a r perlocl the country was plagued with a n epidemic of alpl~abetlcal symbols spawned m Washington, and used a s abbrevlatlons for all manner of tltles and agencies "Maximum effi- cient rate," accordingly, became MER, and those inltlals, a s used by PAW, represented a r a t e of produc- tlon whic11, disregarding economics, correlative rights between fields to share market demand, and any and all other factors, should not be exceeded currently in the ~ n t e r e s t of havlilg 011 with which to fuel the final wlnning punches of the w a r

It was not my oplnlon then, nor is ~t now, t h a t MER should be accepted solely a s a valld factor In peacetime allocation of production between pools Theo- ret~cally, ~f a n entire pool were under one ownership and all phys~cal, chemical, inechamcal, geological, and economic factors and featuies were accurately known, it would be poss~ble to s tate that, fo r a lllnited current perlod of time, and by operating methods 111 use a t the time, a certain amount IS the maxlmuin "efficlent" rate of production froin such reservoir

To my illlnd we would do well to conslder MER a s a temporary espedient employed durlng the w a r perlod, and to refocus our attention on the t ruer objective of "inaxlinum economic recovery" The ~nl t l a l s of this phrase a r e also MER, but, a s abbreviations pernlit confusion of intent, let us wrlte and thlnk of the three words rather than the three letters

Thls suggested expression of object~ve substitutes the word "economlc" for the word "efficlent" In the old phrase Economlc carrles the more accurate connota- tlon, because efficiency 1s a feature to be desired only to the extent that ~t results In econonuc benefit to all partles ~n Interest

Froin a n oil reservolr, productlon efficiency 1s pro- portlonal to the ratio of the amount of 011 produced to the loss In reservoir energy Strictly speaking, then, maxinlunl efficlent rate IS tha t ra te a t whlch the least loss 111 reservolr energy is experienced per barrel of 011 pioduced F o r a pool having a sllghtly effectlve water drlve thls r a t e might lndlcate product~on of 1 bbl per day per well fo r 100 years t o recover the oil F o r a gas-dnve pool the nlaxlinum efficient ra te is obviously t h a t r a t e a t which producing gas-oil ratlo equals the solutlon gas-011 ratlo This, too, IS a p t to be a ra te too low to be econonllc

The nlaximum economlc recovery results froin a pro- duction ra te w h ~ c h wlll give greatest total profit from investment In the properties

The suggested espresslon substitutes the word "re- covery" f o r the word "rate" Ratk 1s just one factor affecting ultimate recovery, and other factors, such a s

return of gas o r water to maliltain o r sustaln reservoir energy, a r e much more Important

From a practical standpoint, I think ~t IS Important to recognize t h a t MER's a s now used by the regulatory bodies In the varlous states, are 'serving a very useful purpose Rather than belng too critical a s t o them engineering exactness, let us first find a suitable sub- stltute

P P Manion, Jr (Stanollnd 011 and Gas Company, Tulsa, Okla ) (written) * Mr Kraus has concisely sketched the development of the concept of a lnaslinum efficlent ra te of production Hls paper should clarlfy the meanlng of MER This IS of considerable importance now t h a t we have reached a demand for oil In excess of our supply We need to know the maximum r a t e a t which our oil-producing reservoirs can be efficiently produced

Mr Kraus polnts to the presence of some confusion a s to the meaning of MER The Regulatory Practlces Commlttee of the Interstate 011 Compact Commission had recently stated t h a t "the term has become asso- elated wlth the broad general meaning of ' that maxl- nluin rate of 011 production froin a field, which, if exceeded durlng the trine perlod contemplated, wlll cause such changes In reservoir fluid conditions a s to result In a loss of ultllnate 011 recovery ' " More brlefly, ~t may be defined a s the highest ra te of productlon wlthout waste, when waste means "the use of reservolr energy for 011-producing purposes by means or methods t h a t unreasonably Interfere with obtalnlng from the common source of supply the largest u l t ~ m a t e recovery of oil . (From Oklahoma statewide rules )

Although'n~any MER's cannot be determined a t thls tline a s precisely a s nught be desired, I feel t h a t in general the establlshinent by the s tate regulatory body, of MER's for fields above the stripper stage and a f te r a hearlng of Interested operators, IS hlghly desirable Such actlon tends to prevent wasteful production rates and aids ~n glvlng some Idea of the natlon's productive capac~ty whlch, among other things, IS useful in estl- matlng fu ture production Inasmuch a s MER's a r e not statlc, they must be redetermined periodically (about once a year should be often enough)

E G Dahlgren (Interstate 011 Compact Commission, Oklahoma City, Okla ) M r Manlon has commented on the report of our Regulatory Practlces Commlttee, whlch was made a t our Great Falls meetlng last August I thought ~t m ~ g h t be of ~ n t e r e s t here t o quote another por t~on of the ibeport, a s follows

"Generally ~t may be sald tha t the requirements t o be considered by the regulatory bodles In fixing MER are a s follows

"That the oil withdrawal rate be such t h a t water drive, where effectlve, be allowed to advance evenly wlthout entrapment of 011 In less permeable areas

'Presented by John R Evans, Stanolind 011 and Gas C o , Tulsn, Okla

" That the field out l~ut , where possible, be llmlted to the ra te of water encroachment, whether natural o r artlficlal

"That, in the absence of re-injectlo11 of reservolr gas, gas-011 ratlos be held to a mlnlinum and, where govern- ing factors permit, the oil be produced only froin the lowest gas-011 rat lo wells

"That, in those fields where recovery 1s alded by gravlty segregation, the withdrawal rates be so adjusted a s t o favor such segregation

AND TECHNOLOGY

"That due consideration of reservolr perineablllty be given in order t h a t production rates and other factors may be adjusted to suit those expulsion pecullarlt~es which a r e attributable to permeabilities "

I also should hke to stress the fact t h a t our s tate regulatory bodles a r e keenly Interested in thls problem, and a r e anxious to work wlth the men In the industry In order to solve these problems I a m sure I can speak for all of them, and tha t they wlll appreciate your cooperatlon whenever possible