What is meant by commingling?
We are starting to see more and more requests from an operator to commingle oil and/or natural gas coming from a certain spacing unit. Without commingling, the oil and/or natural gas that comes from a specific well is kept separate from the oil and/or natural gas produced by another well, even if the two wells are on the same pad. Obviously, it’s a lot easier for the company to allow production from all the wells on a single pad to go into the same pipelines / same storage tanks. Likewise, for two wells very close together, even if they are not on the same pad, it makes economic sense to the operator to be able to commingle the production from both wells into one collecting system.
