1. (a)

   1. (1) Each producer of oil in any field, and each producer of hydrocarbons in liquid form at the wellhead by ordinary production methods from a gas well in any field, shall execute in triplicate and file with the Oil and Gas Commission, El Dorado, Arkansas, a “Producer’s Certificate of Compliance and Authorization to Transport Oil or Gas from Lease”, for each lease that is capable of producing on or after July 15, 1955.

   2. (2)

      1. (A) After the above date, whenever there shall occur a change in operating ownership of any lease in a field within the State of Arkansas, or whenever there shall occur a change of transporter from any lease in a field within the State of Arkansas, a new “Producer’s Certificate of Compliance and Authorization to Transport Oil or Gas from Lease”, shall be executed and filed in accordance with instructions appearing on such form, except that in the case of temporary change in transporter involving less than the allowable for one (1) month, the producer may, in lieu of filing a new certificate, notify the commission at El Dorado, Arkansas, and the transporter then authorized by certificate on file with the commission, by letter, of the estimated amount of oil to be moved by the temporary transporter and the name of such temporary transporter and a copy of such notice shall also be furnished such temporary transporter.
      2. (B) In no instance shall the temporary transporter move any greater quantity of oil than the estimated amount shown in said notice.

   3. (3) The “Producer’s Certificate of Compliance and Authorization to Transport Oil or Gas from Lease”, when properly executed and approved by the commission, shall constitute authorization to the pipeline or other carrier to transport oil from the lease named therein, and shall remain in force and effect until:

      1. (A) The operating ownership of the lease changes;
      2. (B) The transporter is changed; or
      3. (C) The permit is cancelled by the commission.

   4. (4)

      1. (A) Where a transporter disconnects from a particular lease or ceases to remove oil therefrom and another transporter connects to such lease or begins to take oil therefrom, during a month, the transporter who ceases to take oil shall furnish to the connecting transporter a certified statement under oath, showing the:

2. (i) Legal quantity of oil on hand 7:00 a.m., the first day of such month;

   1. (ii) Scheduled allowable to the date disconnected; and

      1. (iii) Quantity of oil moved from the particular lease during the current month.
      2. (B) In such case, the producer shall furnish to the connecting transporter a certified statement under oath showing the lease stock on hand 7:00 a.m., the date of new connection.
      3. (C) No connecting transporter shall move oil from any such lease until after it shall have received such statements, except with the written permission of the commission or their authorized agent.
   2. (5) Each producer is prohibited from delivering illegal oil to any transporter, and each transporter is prohibited from removing any illegal oil from producer’s lease tanks.

   3. (6)

      1. (A) Each transporter shall maintain necessary records of lease allowables and quantities of oil removed from the leases to which he or she is connected, whereby he or she can determine the calculated quantity of legal oil on hand at the close of each calendar month with respect to such leases.
      2. (B) The calculated quantity of legal oil on hand with respect to any lease shall be determined for each succeeding month by adding to the quantity of legally produced oil on hand at the first of the month, the scheduled allowable quantity of oil for the respective lease for the current month, as established by the commission, less the quantity of oil removed from the respective lease tanks during the current month.
      3. (C) If the calculated balance so determined is less than the actual gauged quantity on hand as reported by the producer on the Producer’s Monthly Report, the transporter shall not remove during the following month any part of the oil on hand on the first day of the month in excess of the calculated legal balance so established.

   4. (7)

      1. (A) If the actual quantity of oil on hand with respect to a particular lease equals or is less than the quantity of legal oil established by the above method, the transporter may remove any part or all of such quantity of oil during the current month.
      2. (B) Where actual quantity of oil on hand with respect to a particular lease is less than the calculated quantity of legal oil established by the above method, the transporter, in determining the quantity of legal oil for the next succeeding month, shall substitute the actual quantity on hand for the calculated quantity on hand.

      3. (C) Where there is more than one (1) transporter moving oil from the same lease, the producer and transporters are required to furnish to each other information as:

         1. (i) The quantity of oil on hand;
         2. (ii) The quantity transported from lease tanks; and
         3. (iii) Any additional information necessary to establish to the satisfaction of each person involved the legal status of the oil produced.

3. (b)

   1. (1) Each producer of oil in any controlled oil field, and each producer of hydrocarbons in liquid form at the wellhead by ordinary production methods from a gas well in any controlled gas field, shall furnish for each calendar month a Producer’s Monthly Report, setting forth complete information and data indicated by such forms representing oil and/or liquid hydrocarbons produced from each lease operated by said producer in controlled fields in the State of Arkansas.
   2. (2) Such report for each month shall be prepared and filed according to the instructions on the form, on or before the fifteenth of the next succeeding month.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Source: 1992 rule book)"