Oklahoma Administrative Code › Title 165 - Corporation Commission › Chapter 5 - Aboveground Storage Tanks › Subchapter 7 - Commencement of a Case › Part 3 - OIL AND GAS › Section 165:5-7-9 - Well location exception

Current through Vol. 41, No. 20, July 1, 2024
(a) The
				  application, which shall be limited to a single well, and notice of hearing for
				  an order granting a well location exception for a well drilled or to be drilled
				  for oil or gas into any common source of supply at a location other than that
				  authorized by a rule or order of the Commission shall be served by the
				  applicant no less than fifteen (15) days prior to the date of the hearing, by
				  regular mail, upon the operator of each well located in an adjoining or
				  cornering tract of land or drilling and spacing unit, currently producing from
				  the same common source of supply, toward which tract or unit the well location
				  has been or is proposed to be moved. The application and notice of hearing
				  shall specify the name(s) of the well(s) and operator(s) of the well(s) towards
				  which the location exception well is moving. The application and notice of
				  hearing also shall be served, in the manner required above, upon the operator
				  of any well located in an adjoining or cornering tract of land or drilling and
				  spacing unit currently producing from the same common source of supply, if the
				  requested well location is closer to the offsetting well than would be
				  permitted under the applicable well location tolerances or requirements.
				  Provided, however, if the applicant, or any other entity to be authorized to
				  drill or otherwise operate the subject well, is the operator of any of the
				  wells identified above, then the application and notice of hearing shall be
				  served, in the manner required above, upon each working interest owner in any
				  such well. This Section shall apply to any location exception for any
				  completion in a non-horizontal well, for any completion interval in the lateral
				  of any horizontal well, and for the completion in the non-horizontal portion of
				  a horizontal well.
(b) An
				  application and notice of hearing for an order granting a well location
				  exception pursuant to this Section may also include a request for an exception
				  to OAC 165:10-3-28(c)(2).
				  The application and notice of hearing shall be served in the manner required in
				  subsection (a) of this Section, and shall contain the information required in
				  such subsection. Where an application includes requested relief for both a
				  location exception and exception to OAC
				  165:10-3-28(c)(2),
				  such application shall separately identify respondents for the location
				  exception and respondents for the exception to OAC
				  165:10-3-28(c)(2).
(c) For any well other than a directionally
				  drilled well or a horizontal well, the application and notice of hearing for a
				  location exception shall specify the proposed or actual surface location of the
				  well expressed in feet from the two nearest boundaries of the drilling and
				  spacing unit, or, if no drilling and spacing unit has been established, from
				  the two nearest boundaries of the mineral estate(s) upon which the well will be
				  or has been drilled.
(d) For a
				  directionally drilled well, the application and notice of hearing for a
				  location exception shall specify the proposed or actual subsurface location of
				  the well's entry into and the proposed or actual subsurface location of the
				  well's exit from the common source of supply for which the location exception
				  is requested, expressed in feet from the two nearest boundaries of the drilling
				  and spacing unit or, if no drilling and spacing unit has been established, from
				  the two nearest boundaries of the mineral estate(s) upon which the well will be
				  or has been drilled. For purposes of this section, a directionally drilled well
				  does not include a horizontal well.
(e) For a horizontal well, the application
				  and notice of hearing for a location exception shall specify the proposed or
				  actual subsurface location of the completion interval, as defined by OAC
				  165:10-3-28, within the common
				  source of supply for which the location exception is requested, expressed as
				  the distance in feet from the nearest boundaries of the drilling and spacing
				  unit or, if no drilling and spacing unit has been established, from the nearest
				  boundaries of the mineral estate(s) upon which the well will be or has been
				  drilled.
(f) The proposed
				  subsurface location for a directionally drilled well or a horizontal well may
				  be described in the application and notice of hearing as no closer than
				  specified footages from the nearest boundaries of the drilling and spacing unit
				  or, if no drilling and spacing unit has been established, from the nearest
				  boundaries of the mineral estate(s) upon which the well will be
				  drilled.
(g) At the time of
				  hearing, a well's location, as set out in the application and notice of
				  hearing, may be changed to another location that is not closer to the
				  boundaries of the drilling and spacing unit or mineral estate(s) described in
				  the application and notice of hearing, that is not closer to any offsetting
				  well the operator of which, or any working interest owner in which, was
				  required to be notified under this section, and that does not require notice to
				  additional operators or working interest owners under this section.
(h) If at the time of the hearing on an
				  application for a directionally drilled well or a horizontal well, the
				  applicant does not have the results of the well survey required by OAC
				  165:10-3-27, then the
				  Administrative Law Judge may recommend the issuance of an interim order
				  granting the application and, if so, shall consider whether to adjust the
				  allowable based on the potential locations of the well in each common source of
				  supply for which the order is sought. All potential locations shall be
				  considered in the interim order. If the directionally drilled well or the
				  horizontal well is drilled and completed in compliance with the interim order,
				  the well shall be assigned the allowable as set out in the interim
				  order.
(i) If a directionally
				  drilled or horizontal well is drilled and completed in compliance with an
				  interim order approving a location exception, and no party of record has
				  requested a hearing, the Commission may issue a final order approving the
				  location exception, without further hearing, based on an administrative review
				  by the Commission's Technical Services Department of the following documents,
				  which the applicant must file with the Court Clerk for the record: the
				  directional survey, the well completion report, and an "as drilled" plat
				  constructed from the results of the directional survey. The applicant must also
				  submit a proposed final order to the Commission's Technical Services Department
				  in any case handled through the administrative review process. In the event the
				  directional survey shows that a directionally drilled or horizontal well was
				  not drilled and completed in compliance with the interim location exception
				  order, the applicant shall notify the Commission and all of the parties
				  entitled to notice in the original hearing establishing the interim order by
				  filing an amended application in the case setting forth the actual subsurface
				  locations of the well and by giving proper notice thereof. The actual
				  subsurface locations of the well will be considered at a hearing conducted on
				  the date specified in the interim location exception order, or on such date to
				  which the hearing is continued.
(j)
				  Notice of hearing on an application for an order granting a well location
				  exception for a well drilled or to be drilled for oil or gas at a location
				  other than that authorized by a rule or order of the Commission shall be
				  published pursuant to OAC
				  165:5-7-1(n)(2).
(k) An application for an exception to the
				  minimum distance requirements specified by OAC
				  165:10-3-28(c)(2) and
				  (c)(3) for the completion interval of a
				  horizontal well, the notice of hearing for such exception proceeding and any
				  resulting order in such proceeding shall include the API numbers of the
				  existing well or wells being encroached upon by such horizontal well requiring
				  such exception. Such application shall set forth the proposed subsurface
				  location tolerance area or if available, the actual subsurface locations of the
				  completion interval of such horizontal well requiring such exception. The
				  proposed or actual subsurface locations, as applicable, of the completion
				  interval of the horizontal well requiring such exception may be amended at the
				  hearing on any such application. If the results of the well survey required by
				  OAC 165:10-3-28(c)(1)
				  are not available at the time of the hearing on such an application, the
				  Administrative Law Judge may recommend the issuance of an order granting the
				  application on an interim basis. Any final order issuing in such a proceeding
				  shall specify the distance in feet between the completion interval of the
				  subject horizontal well and the well or wells being encroached upon by such
				  horizontal well requiring such exception.
(l) At the hearing, except for good cause
				  shown, and if requested, submitted to the Technical Services Department for
				  review prior to such hearing, a twelve section or otherwise appropriately sized
				  production plat depicting offset wells located in units adjoining or cornering
				  the units which are the subjects of the application, and a data sheet
				  containing the legal locations, API numbers, operator names, total depths,
				  completion dates, names of producing zones, cumulative production, status, and
				  names of such offset wells, and the plugging dates of such wells, if
				  applicable, and any other exhibits necessary to support the requested relief
				  (e.g. isopach map or structure of the target zone(s), and cross section) shall
				  be provided.
(m) The Commission may
				  request that the record be reopened to receive additional information from the
				  applicant prior to issuance of an order.
Amended at 10 Ok Reg
					 2591, eff 6-25-93; Amended at 14 Ok Reg 2474, eff 7-1-97; Amended at 24 Ok Reg
					 1781, eff 7-1-07; Amended at 27 Ok Reg 2098, eff 7-11-10; Amended at 29 Ok Reg
					 938, eff 7-1-12