2023 New York Laws › ENV - Environmental Conservation › Article 23 - Mineral Resources › Title 5 - Well Permits and Well Spacing in Oil and Natural Gas Pools and Fields › 23-0503 - Well Spacing in Oil and Natural Gas Pools and Fields.

§ 23-0503. Well spacing in oil and natural gas pools and fields.
1.  Spacing  orders  are  not  required  for  wells drilled, deepened,
  plugged back or converted in oil fields or pools which were  discovered,
  developed   and  operated  prior  to  January  first,  nineteen  hundred
  eighty-one. Spacing orders are not required for wells drilled, deepened,
  plugged back or converted in natural gas fields  or  pools,  which  were
  discovered,  developed  and  operated  prior  to January first, nineteen
  hundred ninety-five and which are not being extended.
2. The department shall issue a permit to drill, deepen, plug back  or
  convert a well, if the proposed spacing unit submitted to the department
  pursuant  to  paragraph  a  of  subdivision 2 of section 23-0501 of this
  title conforms to statewide spacing  and  is  of  approximately  uniform
  shape  with other spacing units within the same field or pool, and abuts
  other spacing units in the same pool, unless sufficient distance remains
  between units for another unit to be developed.  Prior  to  issuing  any
  such  permit, the department shall publish a notice of intent to issue a
  well permit in the environmental notice bulletin,  which  shall  include
  information concerning the spacing unit associated with the well.
3.  a.  If  the  proposed  spacing unit does not meet the requirements
  described in subdivision two  of  this  section,  the  department  shall
  determine  if  the proposed spacing unit satisfies the policy objectives
  of section 23-0301 of this article.
b. If the department determines the proposed spacing  unit  meets  the
  policy  objectives  of  section  23-0301 of this article, the department
  shall issue a notice of intent to issue a permit and spacing order.  The
  well  operator  shall  cause  such  notice to be published in a form and
  manner prescribed by the department. If the notice of intent relates  to
  a  proposed  spacing  unit  that is not of a uniform size and shape with
  other spacing units for the field or  pool,  the  department  shall,  if
  necessary,  make  such  adjustment  of the allowable production from the
  well to be drilled thereon so  that  the  owners  in  the  spacing  unit
  receive their just and equitable shares of the production from the pool.
  Any such adjustment of the allowables shall be included in the notice of
  intent to issue a permit and spacing order.
c.  Any  comments  regarding  a notice of intent to issue a permit and
  spacing order must be received by the department within thirty  days  of
  the  date  of  the  notice  of  intent and must meet the substantive and
  significant requirement for establishing an issue for adjudication.  Any
  challenge  to a spacing unit must contain (i) a description and a map of
  the proposed alternative spacing unit; (ii) a technical justification of
  the proposed alternative spacing unit, which shall include a description
  and analysis of the scientific data intended by the owner to support its
  proposed spacing unit configuration; and (iii)  the  name,  address  and
  experience  of  any  expert  witness  proposed  to  support the proposed
  alternative spacing unit configuration. The department may  request  the
  owner challenging the spacing unit to present its scientific data to the
  department.
d.  The department shall determine whether substantive and significant
  issues have been raised. If the department receives no  comments  or  if
  the  comments  do  not  raise  a  substantive and significant issue, the
  department shall issue the permit and the final spacing  order.  If  the
  department  determines that substantive and significant issues have been
  raised in a timely manner, the department shall schedule an adjudicatory
  hearing.
4. The department may  issue  permits  to  drill  infill  wells  on  a
  reasonably  uniform pattern within the spacing unit after an integration
  order has been issued, if required,  and  only  if  it  determines  that
  drilling  infill  wells is necessary to satisfy the policy objectives of

  section 23-0301 of this article. The distances from the unit  boundaries
  set  forth  in  paragraph  b of subdivision 1 of section 23-0501 of this
  title shall apply to any infill wells. For purposes of this section, new
  lateral wellbores drilled from the original wellbore in the unit are not
  considered  infill  wells if they are drilled prior to the first product
  sales from the original surface location. In a spacing unit  established
  pursuant  to clause (vi) of subparagraph 1 of paragraph b of subdivision
  1 of section 23-0501  of  this  title,  infill  wells  shall  be  deemed
  necessary, and the number of infill wells required to satisfy the policy
  objectives  of  section  23-0301  of this article must be drilled within
  three years of the date the first well in the unit commences drilling.
5. For wells permitted prior to the effective  date  of  this  section
  where  a  spacing  order  is  required  but  has  not  been  issued, the
  department shall issue a notice of intent to issue a spacing order.  The
  well  operator  shall  cause  such  notice to be published in a form and
  manner prescribed by the department. The department may issue  an  order
  without  a  hearing  if  the  proposed  spacing  unit  complies with the
  requirements of subdivision two of this section and no  substantive  and
  significant  objections  to  the boundaries of the proposed spacing unit
  are received within thirty days after publication of the notice  by  the
  well  operator.    If  the  department  determines  that substantive and
  significant issues have been raised in a timely manner,  the  department
  shall schedule an adjudicatory hearing.
6.  Unless  it  is  extinguished pursuant to subdivision seven of this
  section, a spacing unit established by the department shall  be  binding
  upon  all  persons  and  their  heirs, successors and assigns. Upon good
  cause shown, an order establishing a spacing  unit  or  a  spacing  unit
  which  conforms  to  statewide spacing may be modified by the department
  without conducting a hearing if a finding has been made  that  no  facts
  are  in  dispute  after  all  affected  persons  have  been  provided  a
  reasonable  opportunity  to  comment.  In  a  spacing  unit  established
  pursuant  to clause (vi) of subparagraph 1 of paragraph b of subdivision
  1 of section 23-0501 of  this  title,  failure  to  drill  infill  wells
  pursuant  to  subdivision  4 of this section shall constitute good cause
  for the department to initiate a modification of the  spacing  unit.  If
  necessary,  upon issuance of an order which changes unit boundaries, the
  well operator shall adjust the accounts for owners within  the  original
  and  modified  units to reflect the modified boundary. Any participation
  by new owners and any adjustment of revenue or royalties resulting  from
  participation by new owners shall be on a prospective basis only. If the
  initial  risk  penalty  phase  pursuant to title 9 of this article is in
  effect, any new owner added to the unit may elect to be integrated as  a
  participating  owner, a non-participating owner or an integrated royalty
  owner as defined by title 9 of this article. Full well  costs  shall  be
  assessed  against  new participating owners and non-participating owners
  and included in the  risk  penalty  calculation.  If  the  initial  risk
  penalty phase has concluded, any new owner added to the spacing unit may
  elect to be integrated as a participating owner or an integrated royalty
  owner on a prospective basis only.
7.  Upon  the  expiration  of  a  well  permit  or  the  plugging  and
  abandonment of all wells in a spacing unit, the spacing  unit  shall  be
  extinguished.    Upon extinguishment, all lands within such spacing unit
  shall be eligible for inclusion in subsequent spacing units.
8. The department, without considering correlative rights, may grant a
  permit to those entities described in paragraphs b and c of  subdivision
  3  of  section  23-1901  of this article for the purposes of natural gas
  development if the department determines, after notice and hearing, that
  the natural gas resource would not be  developed  by  any  other  entity

  within  twelve  months  of the close of the hearing record. In the event
  that the department shall not receive timely notice of appearance  prior
  to  the scheduled date of hearing, it may dispense with such hearing. In
  making  its  determination  the department shall require that the entity
  described in paragraphs b and c of subdivision 3 of section  23-1901  of
  this  article submit a finding made by such entity that such drilling is
  likely to be economically sound, and that the entity in question utilize
  the resource for its exclusive use when granting such a permit.