(a) Any applicant holding a lease may submit an application to install lease automatic custody transfer equipment. The application shall include

(b) Positive displacement meter installations in lease automatic custody transfer equipment shall comply with specifications outlined in the latest revision of American Petroleum Institute Code No. 1101, unless specifically modified with the approval of the State Lands Division. The equipment shall include a means for proportional sampling for securing laboratory test samples, or a means for quality measurement.

(c) Upon determination that acceptable standards of accuracy for measuring oil shipments have been obtained, the commission will approve oil shipments by lease automatic custody transfer.

(d) The equipment shall be maintained and operated in a manner so as to meet the accepted standards of accuracy for the measurement of oil shipments. Use of this equipment shall be discontinued at any time upon determination by the lessee or the inspector that the standards of measurement of accuracy or quality are not being obtained.

(e) The opening and closing meter readings shall be made with a state gauger present.

(f) A memorandum of transfer (run ticket) shall be furnished the State for each run of oil within 24 hours of the completion of such run.

(g) For each run of oil, a copy of official “Gauger's Report of Oil Run” will be furnished to the lessee.

(h) Where approved lease automatic custody transfer equipment is in operation, the provisions of Sections 2104, 2106(d), 2107 and 2109 of this title are not applicable. Where circumstances require conventional gauging for custody transfer, the aforesaid sections shall apply.