North Dakota Administrative Code
Title 43 - Industrial Commission
Article 43-02 - Mineral Exploration and Development
Chapter 43-02-03 - Oil and Gas Conservation
Section 43-02-03-16.2 - Revocation and limitation of drilling permits

Universal Citation: ND Admin Code ยง 43-02-03-16.2

Current through Supplement No. 392, April, 2024

1. After notice and hearing, the commission may revoke a drilling, recompletion, or reentry permit or limit its duration. The commission may act upon its own motion or upon the application of an owner in the spacing or drilling unit. In deciding whether to revoke or limit a permit, the factors that the commission may consider include:

a. The technical ability of the permitholder and other owners to drill and complete the well.

b. The experience of the permitholder and other owners in drilling and completing similar wells.

c. The number of wells in the area operated by the permitholder and other owners.

d. Whether drainage of the spacing or drilling unit has occurred or is likely to occur in the immediate future and whether the permitholder has committed to drill a well in a timely fashion.

e. Contractual obligations such as an expiring lease.

f. The amount of ownership the permitholder and other owners hold in the spacing or drilling unit. If the permitholder is the majority owner in the unit or if its interest when combined with that of its supporters is a majority of the ownership, it is presumed that the permitholder should retain the permit. This presumption, even if not rebutted, does not prohibit the commission from limiting the duration of the permit. However, if the amount of the interest owned by the owner seeking revocation or limitation and its supporters are a majority of the ownership, the commission will presume that the permit should be revoked.

2. The commission may suspend a permit that is the subject of a revocation or limitation proceeding, although a permit will not be suspended after operations have commenced.

3. If the commission revokes a permit upon the application of an owner and issues a permit to that owner or to another owner who supported revocation, the commission may limit the duration of such permit. The commission may also, if the parties fail to agree, order the owner acquiring the permit to pay reasonable costs incurred by the former permitholder and the conditions under which payment is to be made. The costs for which reimbursement may be ordered may include those involving survey of the well site, title search of surface and mineral title, and preparation of an opinion of mineral ownership.

4. If the commission declines to revoke a permit or limit the time within which it must be exercised, it may include a term in its order restricting the ability of the permitholder to renew the permit or to acquire another permit within the same spacing or drilling unit.

General Authority: NDCC 38-08-04

Law Implemented: NDCC 38-08-04

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