Pennsylvania Code › Title 25 - ENVIRONMENTAL PROTECTION › Part I - Department of Environmental Protection › Subpart C - Protection of Natural Resources › Article I - Land Resources › Chapter 79 - OIL AND GAS CONSERVATION › INTEGRATION OF INTERESTS IN SPACING UNITS › Section 79.31 - Application requirements

Current through Register Vol. 54, No. 28, July 13, 2024
When an application is filed for a drilling permit on
						  the area covered by the spacing order, it shall be accompanied by the
						  following:
(1) A survey of the entire
						spacing unit showing the location and acreage content of tracts or portions of
						tracts, included within the spacing unit. If the operators and royalty owners
						included in the unit agree on the amount of acreage contained in each tract
						included in the unit and file a stipulation to that effect, a survey is not
						necessary. A counterpart or certified copy of a unit operating agreement or
						unit agreement signed by all of the operators and royalty owners in the unit,
						and specifying the participation to which each shall be entitled shall meet the
						requirements of the stipulation herein referred to. If accurate surveys of the
						spacing unit or tracts included therein are available, they may be used and a
						new survey is not required.
(2) If
						there is only one operator in the area covered or to be covered by the spacing
						unit, the operator shall file an affidavit to that effect. If there is more
						than one operator owning an interest within the drilling unit, the operators
						shall file a stipulation setting out the manner in which the cost of the
						proposed well is to be paid. A counterpart or certified copy of a joint
						operating agreement containing the provisions shall meet this
						requirement.
(3) In the event that
						all of the operators in the spacing unit have not signed the stipulation set
						out in paragraph (1), the statement shall be filed stating the names and
						addresses of the operators who have not executed the agreement and the
						estimated share of the cost of the well attributable to the interest. The
						operator or operators desiring to drill the well shall include in this
						statement whether or not they are willing to advance the nonparticipating
						operator's share of the cost of the well, and if the well results in
						production, to recover twice the amount of the costs out of the
						nonparticipating operator's share of the production. The participating
						operators shall include the statement with an application for an integration
						order as provided in §
												79.33 (relating to integration
						orders). The Department will then notify the nonparticipating operators that
						they shall come in and file their proportionate share of the estimated cost, or
						a satisfactory bond securing the payment of the amount at the time it is
						expended by the participating operators, with the Department within 30 days
						from the date of the notice. The following provisions shall be alternatives to
						the requirements of this paragraph:
(i) If the
						participating operators have indicated their desire to advance the
						nonparticipating operator's share of the cost, then the notice shall so state
						and shall state that the nonparticipating operator shall then be entitled to
						receive his proportionate share of the production, if any, after a sum equal to
						double his proportionate share of the cost of the drilling and equipping the
						well have been repaid to the participating operators, plus an additional charge
						for supervision, cost of operation, and interest, at the rate of 6% per annum,
						out of 7/8 of the proportionate part of the production from the well drilled on
						the unit which is allocated to the tract or interest owned by the
						nonparticipating operator.
(ii) If
						the participating operators have indicated that they are not willing to advance
						the share of the cost attributable to the nonparticipating operator, the notice
						shall state that this is the fact and that a hearing for the compulsory
						unitization of interests will be held in accordance with §
						79.33.