Current through Register Vol. 35, No. 18, September 24, 2024
A. All lands within a restricted district are
classified as restricted lands and no tract of such lands shall be leased
without being further categorized by the commissioner as either regular or
premium based upon five factors: oil and gas trends; oil and gas traps;
reservoir volume and recovery rating; lease bonus rating; and exploration and
activity. A percentage of zero percent to twenty percent shall be allocated to
each factor. In allocating percentages, the following procedures and criteria
shall be used:
(1) Oil and gas trends, i.e.,
where depositional and structural conditions are favorable for accumulation of
oil and gas, shall be determined as accurately as possible by the commissioner
upon the advice of a qualified geologist using drilling patterns, geological
society data, well records and logs, available seismic surface and subsurface
geological information and structural maps;
(2) The likelihood of locating structural or
stratographic oil and gas traps necessary for the accumulation of oil or gas in
commercial quantities shall be determined by the commissioner upon the advice
of a qualified geologist and a petroleum engineer based upon available seismic
and geological data;
(3) Reservoir
volume and recovery rating shall be determined considering the nearest known
reservoir conditions which may be reasonably assumed to be applicable. Known
porosity, permeability, water saturation, pressures and recovery factors shall
be included when available and shall be utilized by a qualified petroleum
engineer in recommending a reservoir volume and recovery rating;
(4) Lease bonus rating shall be based upon
all available recent leasing data which may be reasonably assumed to be
applicable. In the absence of sufficient recent leasing data, drilling
patterns, geological trends, available seismic data and known or reasonably
assumed structural features may be considered in determining the lease bonus
rating; and
(5) Exploration and
drilling activity shall be determined considering all available information
which may include drilling patterns, approved drilling permits, progress
reports of drilling wells, workover notices and other information which may be
reasonably assumed to be applicable.
B. If the total percentage of all factors for
a tract of land is less than seventy-five percent, the tract shall be
categorized as regular. If the total percentage of all factors for a tract of
land is seventy-five percent or more, the tract shall be categorized as
premium.
