New Well Base Maximum Rate Limitation (Form O-38)

Timeline

Our estimated processing time for this application is 35 business days. See our timeline spreadsheet for updates.

Purpose of the Application

Allowables, or maximum rate limitations (MRLs), are production rate controls applied mainly to oil pools or oil reserves according to Directive 007-1: Allowables Handbook—Guidelines for the Calculation of Monthly Production Allowables in Alberta.

MRLs are assigned to new oil pools when conservation is or might be an issue. They

• limit the effects of depletion on oil pools and ensure that enhanced oil recovery is addressed; and
• help maintain intrapool equity.

Process Checklist

Submit an Application 

Companies must submit their O-38 Application Form. For information on how to complete the form, see the O-38 Application Checklist.

For wells that discover a new pool—or are drilled in a confidential pool or outside the existing pool order boundaries—please complete the form and submit it after 30 days of initial production.

Review Process

1. We share all applications on our Public Notice of Application page to encourage public participation in the approval process.
2. Anyone who believes they may be directly and adversely affected by an application can file a statement of concern (SOC). If we receive an SOC, it may take us longer to process the application.
3. We will assign the application to a subject matter expert for initial review. If information is missing (i.e., the application is not complete), we will close the application. A notification will be sent to the applicant, stating that the well’s status is “drilled and cased.”
4. If the application is complete, we will proceed with a full technical review. We look at
   • the geological aspects and pool designation, including the geological parameters and isopach mapping (if applicable); and
   • the reservoir’s performance, from which we will determine if the reserves must be established or updated. If so, we will calculate the allowables and base gas-oil ratio.
     
     We also consider
      
   • whether the well is designated in a newly defined pool. If so, the pool will be assigned good production practice (GPP) status if it meets our criteria listed in Bulletin 2015-29: Administration of Good Production Practice for Conventional Crude Oil Pools;
   • whether gas volumes are reported as flared on Petrinex. If so, we will assess the application to ensure that Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting requirements have been met;
   • whether the well has oil pay with a gas cap. If so, the applicant may require a secondary approval (for concurrent production); and
   • whether the well is producing from two or more pools without a commingling approval, which we require.
5. Horizontal wells included in MRL pools will be assigned a horizontal well modifier and will be prescribed in the O-38 disposition.
6. In confidential pools, the reserves and base MRLs will be assigned on a well basis.
7. We may request additional information (through a supplemental information request) to complete our technical review.
8. We will decide to approve, close, or deny the application. If we close it, the applicant may reapply without prejudice.
9. We will email the applicant to notify them of our decision, which is accessible through the Integrated Application Registry. We will also share our decision on our Publication of Decision page.