Insufficient System memory to run this query

When I execute the below chunk of code, It reads and appends around 78000 records and gives the error 'Insufficient system memory to run this query'. This occurs only in the Production environment. It doesnot occur in any local or test environment. 

SqlDatareader dr;

StringBuilder appXML = New StringBuilder();

while(dr.Read())
{
appXML.Append(dr.GetSqlXml(1).Value);
}