---
kind: "section"
citation: "43 C.F.R. § 3137.89"
title: "43"
number: "3137.89"
heading: "How does production allocation occur from wells that do not meet the productivity criteria?"
url: "https://uscodex.org/cfr/43/3137.89"
---

# §3137.89. How does production allocation occur from wells that do not meet the productivity criteria?

- (a) If a well that does not meet the productivity criteria was drilled before the unit was formed, the production is allocated on a lease or other federally-approved oil and gas agreement basis. You must pay and report the royalties from any such well either as specified in the underlying lease or other federally-approved oil and gas agreements.
- (b) If you drilled a well after the unit was formed and the well is completed within an existing participating area, the production becomes a part of that participating area production even if it does not meet the productivity criteria. BLM may require the participating area to be revised under [§ 3137.84](/cfr/43/3137.84.md) of this subpart.
- (c) If a well not meeting the productivity criteria is outside a participating area, the production is allocated as provided in [paragraph (a)](#a) of this section.

## Notes

### Source

Source: 67 FR 17886, Apr. 11, 2002, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 6508, 43 U.S.C. 1733 and 1740.

### Source

Source: 46 FR 55497, Nov. 9, 1981, unless otherwise noted.