New Mexico Administrative Code › Title 19 - NATURAL RESOURCES AND WILDLIFE › Chapter 15 - OIL AND GAS › Part 20 - OIL PRORATION AND ALLOCATION › Section 19.15.20.16 - OIL DISCOVERY ALLOWABLE

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				In addition to the normally assigned allowable, the division may assign an oil
				discovery allowable to a well completed as a bona fide discovery well in a new
				common source of supply. The oil discovery allowable shall be in the amount of
				five barrels for each foot of depth of the well from the surface of the ground
				to the top of the perforations in the new pool or the depth of the casing shoe,
				whichever is higher. In counties where there is no other current oil
				production, and in a county when the discovery is the deepest oil production in
				the county, the oil discovery allowable shall be 10 barrels per foot of
				depth.
B. The date of discovery the
				division uses to determine the well that should properly receive the oil
				discovery allowable for a new pool is the date the operator completes the well
				and runs new oil into stock tanks. Provided however, an operator drilling
				through and discovering a new oil pool in the course of drilling to a lower
				horizon may file an affidavit of the discovery within seven days after making
				drill stem tests of the pool, accompanying the affidavit with all available
				pool data. If, prior to the well's completion, another operator claims
				discovery of a similar pool and there are reasonable grounds to believe the
				pools are one and the same, the division shall not assign a discovery allowable
				to either well until after the initial well for which the affidavit was filed
				is completed. If at that time the operator of the initial well formally applies
				for the discovery allowable in the pool, the division shall determine after
				hearing which well receives the discovery allowable.
C. To obtain an oil discovery allowable, the
				owner of a discovery well shall file form C-109 with the appropriate division
				district office and the division's Santa Fe office. Each copy of the form shall
				be accompanied by the following.
(1) A map
				depicting all wells within a two-mile radius of the discovery well. The owner
				of the discovery shall clearly show producing oil and gas wells and the
				formations from which they are producing or have produced as well as all dry
				holes and the depths to which they were drilled. Maps shall be on a scale one
				inch equals 1000 feet and shall also indicate the names of all lessees of
				record in the depicted area.
(2) A
				complete electrical log of the subject well with the tops and bottoms of
				producing formations in the subject well and in nearby wells identified
				thereon.
(3) If the application is
				based on horizontal separation, a sub-surface structural map of the producing
				formations for which the owner of the discovery seek the discovery allowable,
				showing seismic or geological interpretation of the subject structure and any
				troughs, faults, pinch-outs, etc., that separate the subject well from nearby
				wells producing from the same formation or formations.
(4) A geological cross-section prepared from
				electrical logs of the subject well and nearby wells establishing horizontal as
				well as vertical separation from other wells depicted on the plat that are
				producing or have produced from the discovery formation or
				formations.
(5) A summary of all
				available reservoir data including bottom hole pressure data, fluid levels,
				core analyses, reservoir liquid characteristics and any other pertinent data on
				the subject reservoir as well as other nearby reservoirs that may help
				establish whether the subject well is in fact a discovery.