Louisiana Administrative Code › Title 43 - NATURAL RESOURCES › Part XIX - Office of Conservation-General Operations › Subpart 18 - Statewide Order No. 29-S › Chapter 43 - Austin Chalk Formation › Section XIX-4305 - Order

Current through Register Vol. 50, No. 6, June 20, 2024
A. From and after
				  the effective date hereof, permission to develop the Austin Chalk Formation in
				  the state of Louisiana by the use of horizontal wells may be obtained as
				  hereinafter provided and upon strict compliance with the procedures set forth
				  herein.
1. The restriction on tubing size as
				  set forth in LAC 43:XIX.109.E.1 of Statewide Order No. 29-B shall not apply to
				  Austin Chalk Formation horizontal wells.
2. Statewide Order No. 29-E well spacing
				  rules shall not apply to Austin Chalk Formation horizontal wells. The following
				  well spacing rules shall apply to Austin Chalk Formation horizontal wells in
				  areas in which no spacing rules for Austin Chalk Formation horizontal wells
				  have been established by special orders, provided that exceptions may be
				  approved after a public hearing based on 10 days legal notice:
a. a subsequent Austin Chalk Formation
				  horizontal well shall not be located so as to encroach into a rectangle formed
				  by drawing north-south lines 3,000 feet east of the most easterly point and
				  3,000 feet west of the most westerly point and east-west lines 100 feet north
				  of the most northerly point and 100 feet south of the most southerly point of
				  any horizontal well completed in, drilling to, or for which a permit shall have
				  been granted to drill to the Austin Chalk Formation. In the case of a single
				  horizontal well, the point of entry into the Austin Chalk Formation (if
				  available) is to be used in lieu of the surface location in determining the
				  northern or southern boundary of the rectangle;
b. survey plats submitted with the
				  application for permit to drill shall contain certification of the surveyor
				  specifying compliance with this requirement;
c. multiple Austin Chalk Formation horizontal
				  well laterals drilled into the same stratigraphic interval from a single
				  wellbore will be treated as a single completion, even if the laterals are
				  isolated by separate producing strings to the surface.
3. The gas allowable provisions of Statewide
				  Order No. 29-F shall not apply to Austin Chalk Formation horizontal wells.
				  Instead, Austin Chalk Formation horizontal wells shall be given an allowable
				  based on the Maximum Efficient Rate (MER) of the well, being the maximum
				  sustainable daily withdrawal rate from the reservoir which will permit
				  economical development and depletion without causing waste. In the event an
				  alternate unit well is authorized for any Austin Chalk Formation unit, such
				  unit allowable shall be limited to the greater of the MER of the best well in
				  said unit or the highest rate of withdrawal on a per acre basis of any unit in
				  the same reservoir and field. If there is any complaint of waste or dispute
				  relative to compliance with
				  R.S.
				  30:11(B), the allowable
				  assigned to an Austin Chalk Formation horizontal well shall be subject to
				  adjustment after a public hearing based on 10 days legal notice.
a. Unless an exception is granted as provided
				  herein, no allowable will be granted for a horizontal completion in the Austin
				  Chalk Formation until a unit has been formed pursuant to an Office of
				  Conservation Order for the well unless the operator agrees to escrow all monies
				  received from pre-unitization production pending unitization and distribute
				  such funds on the basis of the unit ultimately established.
b. The operator of a well may request an
				  exception to this requirement for a well located on a large lease/voluntary
				  unit or for other good cause shown.
c. The Commissioner of Conservation will have
				  the discretion to either approve or deny such application or require that the
				  applicant request a public hearing to be held after 10 days legal notice to
				  consider the matter.
4.
				  The Office of Conservation's policy requiring a sand definition and production
				  test in the field before units can be established shall not apply to Austin
				  Chalk Formation horizontal wells.
5. The size and shape of units for Austin
				  Chalk Formation horizontal wells should usually be based on the proposed design
				  of the well because such units are expected to be developed by horizontal
				  laterals which traverse the entire unit in a generally north-south direction.
				  If the initial lateral in a drilling unit fails to provide full horizontal
				  coverage in a north-south direction, additional horizontal laterals or wells
				  drilled to acquire that coverage shall be considered and named unit wells
				  rather than alternate unit wells. However, if any such additional unit well or
				  lateral overlaps an existing unit well or lateral in an east-west direction, it
				  shall be considered and named an alternate unit well. Overlaps shall be
				  determined by use of a line parallel to the north and south unit boundaries.
				  This provision shall only apply to Austin Chalk Formation horizontal wells and
				  shall not be used as a precedent for any other formation.
6. The party who owns or controls the
				  majority working interest in a drilling unit established for an Austin Chalk
				  Formation horizontal well shall have the right to be designated the operator of
				  such unit. Such ownership or control shall be based on sworn testimony at the
				  public hearing which creates the drilling unit. If the working interest
				  ownership or control in a unit is not known or cannot be established with
				  reasonable certainty when the unit is created, then the operator designation
				  shall occur when a drilling permit is issued for the drilling of a well on the
				  unit. The party requesting such drilling permit shall complete and file an
				  affidavit corroborating such majority ownership or control on the affidavit
				  form provided by the file in the Office of Conservation. It is provided,
				  however, that any party designated as a unit operator can be removed or a
				  working interest owner who does not own or control the majority in working
				  interest can be designated as unit operator after a public hearing based on 10
				  days legal notice if it is demonstrated that the designated operator and/or
				  majority working interest owner has not timely developed the unit, has not
				  acted prudently, or that other good cause exists therefor.
7. Statewide Order No. 29-B requires that a
				  directional survey be run on all wells which are directionally controlled and
				  thereby intentionally deviated from the vertical. The requirement that a
				  directional survey be run the entire length of the lateral in an Austin Chalk
				  Formation horizontal well may be waived by the Office of Conservation if
				  evidence is presented at the time such waiver is requested that the directional
				  survey cannot reasonably reach the end of the lateral and that measuring from
				  the point where the directional survey ends, the lateral of the well will still
				  be:
a. within the spacing provisions for the
				  unit upon which it has been drilled or, if a unit has not been established,
				  under a tract for which authority to drill has been obtained; and
b. at least the distance from all offsetting
				  wells required by applicable spacing rules or in the absence thereof, the
				  provisions of §4305. A 2
8. An application for permit to drill in an
				  area affected by a pending application requesting the formation of one or more
				  units will be issued without regard to the pending unitization proceedings.
				  However, the permit so issued shall not be used at the hearing (only drilled
				  wells may be considered), and the permit will be subject to the order issued as
				  a result of such hearing.