(a) If the approved FMP is located on the well pad of a directionally or horizontally drilled well that produces oil and gas from a lease, unit, or communitized area on which the well pad is not located, measurement at the FMP does not constitute off-lease measurement. However, if the FMP is located off of the well pad, regardless of distance, measurement at the FMP constitutes off-lease measurement, and BLM approval is required under §§3173.22 through 3173.26.

(b) If a lease, unit, or CA consists of more than one separate tract whose boundaries are not contiguous (e.g., a single lease comprises two or more separate tracts), measurement of production at an FMP located on one of the tracts is not considered to be off-lease measurement if:

(1) The production is moved from one tract within the same lease, unit, or communitized area to another area of the lease, unit, or communitized area on which the FMP is located; and

(2) Production is not diverted during the movement between the tracts before the FMP, except for production used royalty free.