spacing - university of oklahomajay.law.ou.edu/faculty/eking/oilgaspractice/fall 2012/9-6-12...
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Spacing• Actual Notice at least 15 days prior to Hearing to
all parties who have the right to share in production
• File Application
• Notice via regular mail at least 15 days before Hearing
• Publication Notice – At least 15 days prior in County where Land is situated and Oklahoma County before the Hearing
• Hearing
• Issues
Any well drilled for oil or gas to an unspaced common source of
supply the top of which is 2,500 feet or more in depth shall be
located not less than 330 feet from any property line or lease
line, and shall be located not less than 600 feet from any
producible or drilling oil or gas well when drilling to the same
common source of supply; provided and except that in drilling to
an unspaced common source of supply the top of which is less
than 2,500 feet in depth, the well shall be located not less than
165 feet from any property line or lease line and not less than
300 feet from any other producible or drilling oil or gas well in
the same common source of supply; provided however, that the
depth to the top of the common source of supply in the original
or discovery well shall be recognized as the depth to the top of
the common source of supply for the purpose of this section;
provided further, when an exception to this Section is granted,
the Commission may adjust the allowable or take such other
action as it deems necessary for the prevention of waste and
protection of correlative rights.
Drilling and Spacing Units
OAC 165: 10-1-22(a) The Commission may establish drilling and spacing units
in any common source of supply a s provided by law, and the
special orders creating drilling and spacing units shall
supersede the provisions of 165:10-1-21. It shall be
The responsibility of any operator who proposes to drill a
well to ascertain the existence and provisions of special
spacing orders.
(b) The drilling of a well or wells in to a common source of supply
in an area covered by an application pending before the
Commission seeking the establishment of drilling and spacing
units is prohibited except by special order of the Commission.
However, if an Intent to Drill (Form 1000) has been approved by
the Commission and operations commenced prior to the filing of
a spacing application, the operator shall be permitted to drill and
complete the well without a special order of the Commission.
• (a) The permitted well location within any standard square
drilling and spacing unit shall be the center of the unit. The
permitted well locations within standard rectangular drilling
and spacing units shall be the centers of alternate square
tracts constituting the units (alternate halves of the units);
provided, however, a well will be deemed drilled at the
permitted location if drilled within the following tolerance
areas:
• (1) Not less than 165 feet from the boundary of any
standard 10-acre drilling and spacing unit or the proper
square 10-acre tract within any standard 20-acre drilling
and spacing unit.
� (2) Not less than 330 feet from the boundary of any
standard 40-acre drilling and spacing unit or the proper
square 40-acre tract within any standard 80-acre
drilling and spacing unit.
� (3) Not less than 660-feet from the boundary of any
standard 160-acre drilling and spacing unit or the
proper square 160-acre tract within any standard 320-
acre drilling and spacing unit.
� (4 ) Not less than 1320 feet from the boundary of any
standard 640-acre drilling and spacing unit.
Drilling and Spacing Units
• A Township - 36 Sections of Land
• Size of Drilling and Spacing Units
– 640 acres (Section)
– 320 acres – stand-up or laydown units
– 160 acres (Quarter Section)
– 80 acres – stand-up or laydown units
– 40 acres (Quarter Quarter Section)
– 20 acres Stand-Up or Lay-Down Units
– 10 acres (Quarter Quarter Quarter Section)
A Township - 36 Sections of Land
36 31 32 33 34 35 36 31
1 6 5 4 3 2 1 6
12 7 8 9 10 11 12 7
13 18 17 16 15 14 13 18
24 19 20 21 22 23 24 19
25 30 29 28 27 26 25 30
36 31 32 33 34 35 36 31
1 6 5 4 3 2 1 6
Proper Well Location Requirements
• 640 acres - No closer than 1320 feet from unit boundaries
• 320 acres - Stand-Up or Lay-Down Units – No closer than 660 feet from proper Quarter Section i.e. on NW-SE proper location within each 320 acre unit (or can be NE-SW)
• 160 acres –No closer than 660 from unit boundaries
• 80 acres – Stand-Up or Lay-Down Units – No closer than 330 feet from proper Quarter QuarterSection i.e. on NW-SE proper location within each 80 acre unit (or can be NE-SW)
Proper Well Location Requirements
(continued)
• 40 acres No closer than 330 feet from unit boundary
• 20 acres Stand-Up or Lay-Down Units - No closer
than 165 feet from proper Quarter Quarter Section
i.e. on NW-SE proper location within each 20 acre
unit (or can be NE-SW)
• 10 acres – No closer than 165 feet from unit
boundary
Vertical
Drilling and Spacing Causes
Samples applications/notices/orders
• 40-acre units
• 80 acre stand-up units
• 160-acre units
• 320-acre lay-down Units
• 640-acre units
(1) Within 30 days after completion of a horizontal well, the
operator shall show that the location of the completion interval
complies with the applicable general rule, location exception
order, or other order of the Commission by submitting the
following to the Technical Services Department:
(A) A directional survey run in the horizontal well.
(B) A plat constructed from the results of the directional
survey showing the completion interval.
(2) The completion interval of a horizontal well shall be located
not closer than the minimum distance as set out below from any
other oil or gas well completed in the same common source of
supply except as authorized by a special order of the
Commission:
(A) Three hundred feet from any other oil or gas well
completed in the same common source of supply, the top of
which is less than 2,500 feet in true vertical depth.
B) Six hundred feet from any other oil or gas well completed
in the same common source of supply, the tope of which is
2,500 feet or more in true vertical depth.
(C) This paragraph does not apply to horizontal wells drilled in
a unit created for secondary or enhanced recovery operations
pursuant to 52 O.S. § 287.1 et seq. or to horizontal wells
drilled in a horizontal well unitization created pursuant to 52
O.S. § 87.6 et seq.
In a horizontal well drilled in a common source of supply in
which the Commission has not established any drilling and
spacing units or horizontal well units, the completion interval of
a horizontal well may not be located closer to the boundaries of
the applicable mineral estate, oil and gas leasehold estate, or
voluntary unit than the minimum distance set out below except
as authorized by a special order of the Commission:
(1) Not less than 165 feet when the top of the common source
of supply is less than 2,500 feet in true vertical depth.
(2) Not less than 330 feet when the top of common source of
supply is 2,500 feet or more in true vertical depth.
(1) A horizontal well may be drilled on any drilling and spacing
unit.
(2) A horizontal well unit may be created in accordance with
165:10-1-22 and 165:5-7-6. Such units shall be created as new
units after notice and hearing as provided for by the Rules of
Practice, OAC 165:5.
(3) The Commission may create a non-standard horizontal well
unit covering contiguous lands in any configuration or shape
deemed by the Commission to be necessary for the
development of a conventional reservoir or an
unconventional reservoir by the drilling of one or more
horizontal wells. A non-standard horizontal well unit may not
exceed 640 acres plus the tolerances and variances allowed
pursuant to 52 O.S. § 87.1.
(f) Horizontal well location
requirements for horizontal well units
and horizontal well unitizations
(1) Conventional reservoirs. In a conventional reservoir, the
completion interval of a horizontal well in a horizontal well unit
shall be located not less than the minimum distance from the
unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80- or
160-acre horizontal well unit.
(C) Not less than 660 feet from the boundary of any 320- or
640-acre horizontal well unit.
(2) Unconventional reservoirs. In an unconventional reservoir,
the completion interval of a horizontal well in a horizontal well
unit shall be located not less than the minimum distance from
the unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80-, 160-,
320-, or 640-acre horizontal well unit.
(3) Horizontal well unitizations. The completion interval of a
horizontal well in a horizontal well unitization shall not be
located less than 330 feet from the unit boundary.
The Commission may establish well location requirements
different from those provided in subsection (f) of this Section
when necessary to prevent waste and protect correlative rights.
These requirements may be established in the order creating a
standard or nonstandard horizontal well unit or through a special
rule of the Commission covering a conventional or
unconventional reservoir in a designated geographic area. (see
OAC 165:10, Subchapter 29, Special Area Rules).
(g) Alternative well location
requirements
(1) Horizontal oil well allowables may be established
administratively using the standard allowables provided in
Appendix A (Allocated Well Allowable Table) supplemented by
the additional allowables provided in Appendix C (Table HD) to
this Chapter.
(2) The allowable for a horizontal gas well shall be computed in
the manner prescribed for a non-horizontal gas well in the same
common source of supply.
(h) Allowable
(3) The allowable for a horizontal well unit or horizontal well
unitization with multiple horizontal gas wells shall be the sum of
allowables for the separate horizontal gas wells. From this
summation, the allowable for each horizontal gas well will be
calculated as if it were the only well in the unit.
(4) The allowable for a multi-unit horizontal well shall be
allocated to each affected unit using the allocation factors
determine in accordance with 52 O.S. § 87.8(B)(1).
Horizontal well units, horizontal well unitizations and multi-unit
horizontal wells may be pooled as provided in 52 O.S. § 87.1, 52
O.S. § 87.6 et seq. and Commission Rules of Practice, OAC 165:5.
Pooling
(a) Scope and effect. The well location requirements of this
Section apply to horizontal wells completed in horizontal well
units in designated common sources of supply and
geographic areas as specified in this Section. Horizontal wells
covered by this Section are subject to OAC 165:10-3-28 and
other applicable Commission rules except as provided in this
Section.
(b) Woodford shale.
(1) This subsection applies to horizontal wells completed in
the Woodford shale common source of supply in Atoka,
Blaine, Caddo, Canadian, Coal, Dewey, Grady, Haskell,
Hughes, Kingfisher, LeFlore, Latimer, McIntosh, Pittsburg,
and Sequoyah Counties.
(2) The completion interval of a horizontal well subject to this
subsection shall be located not less than the minimum
distance from the boundary of a standard or non-standard
horizontal well unit as follows:
(A) Not less than 330 feet from an east or west unit
boundary.
(B) Not less than 165 feet from a north or south unit
boundary.
Appendix C: Table HD
Recommended Additional Allowable for Horizontal Oil Wells
based on True Vertical Depth and Completion Interval
Average True Vertical
Depth of Pool in Feet
Additional Allowable
in Barrels per foot of
Completion Interval
To 4,000 .2
4,001 to 8,000 .3
8,001 to 12,000 .4
Greater than 12,000 .5
All oil produced and marketed during the drilling and completion
operations shall be charged against the allowable assigned to the
well upon completion.
Effective date of the allowable shall be the date of first
production.
Horizontal Spacing
(OCC Rules and Regulations)
OAC: 165:5-7-6(g)
OAC: 165:5-7-6(h)
OAC: 165:5-7-6(i)
OAC: 165:5-7-6.1
OAC: 165:5-7-6.2
OAC: 165:10-1-21
OAC:165:10-1-24
OAC:165:10-1-25
OAC:165:10-3-4(f)
OAC:165:10-3-27(c)(1)
OAC:165:10-3-28
Appendix C (Table HD)
(Case Law)
Samson Resources Company v. Corporation
Commission, 831 P.2d 663, 665 (Okla. App 1992)
Horizontal Pooling
(OCC Rules and Regulations)
OAC:165:5-15-3(g)
OAC:165:5-13-3(h)
Deviation from the Vertical(OCC Rules and Regulations)
OAC:165:10-3-27
Horizontal Allowables
(OCC Rules and Regulations)
OAC:165:10-3-28(C)(2)
OAC:165:10-3-28(f)(1)
OAC:165:10-3-28(f)(2)
OAC:165:10-3-28(h)(2)
OAC:10-3-29(j)(1)
Horizontal Gross Production Tax
(OCC Rules and Regulations)
OAC:165:10-21-65
OAC:165:10-21-66
OAC:165:10-21-67
OAC:165:10-21-68
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