Cal. Public Resources Code - PRC 8. — ARTICLE 8. Recommendation of Maximum Efficient Rates of Production [3450. - 3451.] | Public Resources Code - PRC — California

Cal. Public Resources Code - PRC § 3450. Section 3450.

The Legislature takes notice of the existence of the Conservation Committee of California Oil Producers and of the fact that said committee for a number of years last past, in the interest of the conservation of oil and gas, has made recommendations of maximum efficient rates of production and for the intrapool distribution of such maximum efficient rates of production with respect to oil pools, capacity production from which pools would result in a loss of ultimate production. The Legislature declares that recommendations for such purpose are in the interest of the conservation of the oil and gas resources of this State and that it is lawful for said committee or any other committee of oil producers to issue such recommendations as to any such oil pool and for producers of oil to comply therewith or to agree to comply therewith, provided: (a) Copies of all such recommendations shall be currently delivered to the supervisor and shall be open to public inspection in the office of the supervisor; and (b) Any such committee shall make available to the supervisor its records, files, minutes, reports and other data pertaining to such recommendations. The supervisor in his discretion may join in any such recommendations or may express his disapproval thereof. The supervisor, in the absence of such recommendations by a committee of oil producers with respect to any of such pools, or if the supervisor deems any such recommendations to be insufficient or incorrect, may issue recommendations with respect to any such pools on said subject matter, and it shall be lawful for producers to comply therewith or to agree to comply therewith. Neither a disapproval by the supervisor nor a recommendation by him shall constitute a basis for implying any obligation for producers of oil to comply with such a disapproval or recommendation. Nothing herein contained shall be deemed to permit the production of gas in violation of Articles 5 and 6 of Chapter 1 and Chapter 2 of this division.

Cal. Public Resources Code - PRC § 3451. Section 3451.

“Maximum Efficient Rate,” commonly referred to as “MER,” is defined as the highest daily rate of production which can be sustained economically from a particular pool, from existing wells and facilities, for a reasonable period without loss of economically recoverable ultimate production of oil from such pool.