Current through Register Vol. 48, No. 12, March 22, 2024
a) Commencement of Action
1) Any interested person may petition the
Department for a hearing to establish a drilling unit or units for the
production of oil and gas or either of them for each pool to which the
interested person owns some portion of the oil and gas. (Section 21.1 of the
Act)
2) The petition for hearing to
establish a drilling unit or units shall contain the following:
A) The name and address of the
petitioner;
B) A legal description
of the size of the drilling unit sought to be established;
C) A legal description of the extent of the
reservoir to which the drilling unit or units are sought to be
established;
D) A list of the names
and addresses of all permittees of oil or gas interests in the
reservoir;
E) A geologic
description of the pool and an isopach and structure map of the reservoir, for
which the drilling unit is sought showing the productive limits of the
reservoir;
F) A plat showing all
oil and gas or water injection or storage wells completed within the pool
(reservoir);
G) Geologic and
engineering reports outlining the reasons for and data supporting the proposed
size of the drilling unit or units.
3) If the establishment of a drilling unit or
units would require the integration of separately owned interests in the
drilling unit or units, the petitioner may contemporaneously file a petition
under Section
240.132 and
the matters shall then be consolidated and heard together.
b) Execution and Filing
1) The petition to establish drilling units
shall be sent to the Department at One Natural Resources Way, Springfield IL
62702.
2) Every petition shall be
signed by the petitioner or his or her representative and the petitioner's
address shall be stated on the petition. The signature of the petitioner or his
or her representative constitutes a certificate that he or she has read the
petition and that, to the best of his or her knowledge, information and belief,
there is good ground to support the petition. The petition shall be accompanied
by a non-refundable application fee in the amount of $2,500.
3) If the Department finds the petition
deficient relative to the requirements of subsection (a), subsection (b)(2) or
Section
240.250(b),
the petition shall not be accepted and the Department shall return the petition
to the applicant with a statement as to the deficiencies. The Department shall
return any unaccepted petition within 30 days after its receipt. A returned
petition shall not be considered filed until the deficiencies have been
cured.
c) Notice of
Hearing
1) Upon the receipt of an accepted
petition to establish drilling units, the Department shall fix the time and
place for a hearing.
2) The
Department shall prepare a notice of hearing, which shall issue in the name of
the State of Illinois and shall be signed by the Director. The notice shall
specify the number and style of the proceeding, the time and place of the
hearing, the purpose of the hearing, the name of the petitioner, and a legal
description of the affected lands. The notice shall also state that any
interested person may file an entry of appearance in the hearing by submitting
an entry of appearance in writing to the Department and that person shall be
deemed a party of record in the proceeding.
3) The Department shall mail the notice to
the petitioner who shall then serve notice in the following manner:
A) By mailing the notice by U.S. Postal
Service certified mail with return receipt, directed to the persons named in
the petition pursuant to subsection (a)(2)(D) at their last known addresses at
least 20 days prior to the hearing; and
B) By publication of the notice for service
on those persons whose addresses are unknown or whose names are unknown and for
those owners of unleased mineral rights, once each week for 2 consecutive
weeks, with the first notice appearing at least 20 days prior to the hearing in
a newspaper of general circulation published in each county containing some
portion of the proposed integrated unit.
4) Whenever the Department determines that a
notice of hearing should be served upon a person because the granting or
denying of the relief requested in the petition would materially affect that
person's rights or property, the Department shall cause notice to be sent to
the person, as provided in this subsection (c).
d) Pre-Hearing Conferences
1) Upon his or her own motion or the motion
of a party, the Hearing Officer shall direct the parties or their counsel to
meet for a conference in order to:
A) Simplify
the factual and legal issues presented by the hearing request;
B) Receive stipulations, admissions of fact
and of the contents and authenticity of documents;
C) Exchange lists of witnesses the parties
intend to have testify and copies of all documents the parties intend to
introduce into evidence at the hearing; and
D) Discuss and resolve such other matters as
may tend to expedite the disposition of the hearing request and to assure a
just conclusion.
2)
Pre-hearing conferences may be held by telephone conference if that procedure
is acceptable to all parties.
e) Hearing
1) Conduct of Hearing: Every hearing shall be
conducted by a Hearing Officer designated by the Director. The Hearing Officer
shall take all necessary action to avoid delay, to maintain order and to
develop a clear and complete record, and shall have all powers necessary and
appropriate to conduct a fair hearing and to render a decision on the petition,
including the following:
A) To administer
oaths and affirmations;
B) To
receive relevant evidence;
C) To
regulate the course of the hearing and the conduct of the parties and their
counsel;
D) To consider and rule
upon procedural requests;
E) To
examine witnesses and direct witnesses to testify, limit the number of times
any witness may testify, limit repetitive or cumulative testimony and set
reasonable limits on the amount of time each witness may testify;
F) To require the production of documents or
subpoena the appearance of witnesses, either on the Hearing Officer's own
motion or for good cause shown on motion of any party of record.
2) Every interested person wishing
to participate at the hearing shall enter an appearance in writing. The Hearing
Officer shall determine if the interested person shall be allowed to enter as a
party of record. The Hearing Officer shall base that determination on the same
standards used to determine parties in the Circuit Court.
3) All participants in the hearing shall have
the right to be represented by counsel.
4) The Hearing Officer shall allow all
parties to present statements, testimony, evidence and argument as may be
relevant to the proceeding.
5) At
least one representative of the Department shall appear at any hearing held
under this Section and shall be given the opportunity to question parties or
otherwise elicit information necessary to reach a decision on the
petition.
6) When applicable, the
following shall be addressed prior to receiving evidence:
A) The petitioner may offer preliminary
exhibits, including documents necessary to present the issues to be heard,
notices, proof of publication and orders previously entered in the
cause.
B) Ruling may be made on any
pending motions.
C) Any other
preliminary matters appropriate for disposition prior to presentation of
evidence may be addressed.
f) Evidence
1) Admissibility: A party shall be entitled
to present his or her case by oral or documentary evidence, to submit rebuttal
evidence, and to conduct cross-examination as may be required for a full and
true disclosure of the facts. Any oral or documentary evidence may be received
but the presiding Hearing Officer shall exclude evidence that is irrelevant,
immaterial or unduly repetitious. The rules of evidence and privilege applied
in civil cases in the courts of the State of Illinois shall be followed;
however, evidence not admissible under those rules of evidence may be admitted,
except when precluded by statute, if it is of a type commonly relied upon by
reasonable, prudent men in the conduct of their affairs. Subject to these
requirements, when a hearing will be expedited and the interests of the parties
will not be prejudiced, a Hearing Officer shall allow evidence to be received
in written form.
2) Official
Notice: Official notice may be taken of any material fact not appearing in
evidence in the record if the circuit courts of this State could take judicial
notice of that fact. In addition, notice may be taken of generally recognized
technical or scientific facts within the Department's specialized
knowledge.
3) Order of Proof: The
petitioner shall open the proof. Other parties of record shall be heard
immediately following the petitioner. The Hearing Officer or Department
representatives may examine any witnesses. In all cases, the Hearing Officer
shall designate the order of proof and may limit the scope of examination or
cross-examination.
4) Briefs: The
Hearing Officer may require or allow parties to submit written briefs to the
Hearing Officer within 10 days after the close of the hearing or within such
other time as the Hearing Officer shall determine as being consistent with the
Department's responsibility for an expeditious decision.
g) Record of Proceedings; Testimony
The Department shall provide at its expense a certified
shorthand reporter to take down the testimony and preserve a record of all
proceedings at the hearing. Any person testifying shall be required to do so
under oath. However, relevant unsworn statements, comments and observations by
any interested person may be heard and considered by the Department and
included in the record.
h)
Postponement or Continuance of Hearing
A hearing may be postponed or continued for due cause by the
Hearing Officer upon his or her own motion or upon the motion of a party to the
hearing. A motion filed by a party to the hearing shall set forth facts
attesting that the request for continuance is not for the purpose of delay.
Except in the case of an emergency, motions requesting postponement or
continuance shall be made in writing and shall be received by all parties to
the hearing at least 3 business days prior to the scheduled hearing date. All
parties involved in a hearing shall avoid undue delay caused by repetitive
postponements or continuances so that the subject matter of the hearing may be
resolved expeditiously.
i)
Default
If a party, after proper service of notice, fails to appear
at the pre-hearing conference or at a hearing, and if no continuance is
granted, the Department may then proceed to make its decision in the absence of
that party. If the failure to appear at a pre-hearing conference or hearing is
due to an emergency situation beyond the parties' control, and the Department
is notified of the situation on or before the scheduled pre-hearing conference
or hearing date, the pre-hearing conference or hearing will be continued or
postponed pursuant to Section
240.133(h).
Emergency situations include sudden unavailability of counsel, sudden illness
of a party or his or her representative, or similar situations beyond the
parties' control.
j) Order
1) Upon the conclusion of any hearing held
under this Section, the Hearing Officer, after consultation with the Department
representatives, shall prepare an order disposing of the petition, which shall
be presented to the Director for entry.
2) The order shall grant the petition based
on the record if the Hearing Officer finds that establishing the drilling unit
will prevent waste, protect the correlative rights of the owners in the pools,
and prevent the unnecessary drilling of wells.
3) No drilling unit shall be established
which requires the allocation of more than 40 acres of surface area nor less
than 10 acres of surface area to an individual well for production of oil from
a pool the top of which lies less than 4000 feet beneath the surface (as
determined by the original or discovery well in the pool) provided, however,
that the Department may permit the allocation of greater acreage to an
individual well and provided further that the spacing of wells in any pool the
top of which lies less than 4000 feet beneath the surface (as determined by the
original or discovery well in the pool) shall not include the fixing of a
pattern except with respect to the 2 nearest external boundary lines of each
drilling unit. (Section 21.1 of the Act)
4) The drilling units established by an order
under this Section shall be of approximately uniform size and shape for each
entire pool, except that where circumstances reasonably require, the Department
may grant exceptions to the size or shape of any drilling unit or units, in
which case the order shall state the particular circumstances that require the
exception.
5) Each order
establishing drilling units shall specify the size and shape of the unit, which
shall be such as will result in the efficient and economical development of the
pool as a whole, and subject to the provisions of subsection (j)(3), the size
of no drilling unit shall be smaller than the maximum area that can be
efficiently and economically drained by one well.
6) Each order establishing drilling units for
a pool shall cover all lands determined or believed to be underlain by such
pool. Each order establishing drilling units may be modified by the Department
to change the size thereof, or to permit the drilling of additional
wells.
7) Each order establishing
drilling units shall prohibit the drilling of more than one well on any
drilling unit for the production of oil or gas from the particular pool with
respect to which the drilling unit is established and subject to the provisions
of subsection (j)(3) shall specify the location for the drilling of such well
thereon, in accordance with a reasonably uniform spacing pattern, with
necessary exceptions for wells drilled or drilling at the time of the
application. If the Department finds, after notice and hearing, notice being
made as provided in this Section to all parties of record in the proceeding,
that surface conditions would substantially add to the burden or hazard of
drilling such well at the specified location, or for some other reason it would
be inequitable or unreasonable to require a well to be drilled at the specified
location, the Department may issue an order permitting the well to be drilled
at a location other than that specified in the order establishing drilling
units.
8) After the date of the
notice for a hearing called to establish drilling units, no additional well
shall be commenced for production from the pool until the order establishing
drilling units has been issued unless the commencement of the well is
authorized by order of the Department.
9) After an order establishing a drilling
unit or units has been issued by the Department, the commencement of drilling
of any well or wells into the pool with regard to which such unit was
established for the purpose of producing oil or gas therefrom, at a location
other than that authorized by the order, or by order granting exception to the
original spacing order is hereby prohibited. (Section 21.1 of the
Act)
10) As an alternative to
denying the petition for a drilling unit, the Department may issue an interim
order outlining the substantive deficiencies that must be cured by the
petitioner in order to avoid dismissal. If the petitioner supplies the
information requested by the Department, a new hearing shall be scheduled in
order to examine the documents. If the petitioner fails to comply with the
interim order, the petition shall be denied. The Department shall send notice
of the hearing to all parties of record.
k) Order - Final Administrative Decision
The Director's order is a final administrative decision of
the Department, pursuant to Section 10 of the Act.