Current through Reg. 49, No. 12; March 22, 2024
(a)
Definitions. The following words and terms, when used in this section, shall
have the following meanings, unless the context clearly indicates otherwise.
(1) Commission designee--Director of the Oil
and Gas Division or any Commission employee designated in writing by the
director or the Commission.
(2)
Drilling unit--The acreage assigned to a well for drilling purposes.
(3) Proration unit--The acreage assigned to a
well for the purpose of assigning allowables and allocating allowable
production to the well.
(4)
Substandard acreage--Less acreage than the smallest amount established for
standard or optional drilling units.
(5) Surplus acreage--Substandard acreage
within a lease, pooled unit, or unitized tract that remains unassigned after
the assignment of acreage to each applied for, permitted, or completed well in
a field, in an amount equaling or exceeding the amount established for standard
or optional drilling units. Surplus acreage is distinguished from the term
"tolerance acreage,"in that tolerance acreage is defined in context with
proration regulation, while surplus acreage is defined by this rule only in
context with well density regulation.
(6) Tolerance acreage--Acreage within a
lease, pooled unit, or unitized tract that may be assigned to a well for
proration purposes pursuant to special field rules in addition to the amount
established for a prescribed or optional proration unit.
(b) Density requirements.
(1) General prohibition. No well shall be
drilled on substandard acreage except as hereinafter provided.
(2) Standard units.
(A) The standard drilling unit for all oil,
gas, and geothermal resource fields wherein only spacing rules, either special,
country regular, or statewide, are applicable is hereby prescribed to be the
following.
Attached
Graphic
(B) The
spacing rules listed in subparagraph (A) of this paragraph are not exclusive.
If any spacing rule not listed in subparagraph (A) of this subsection is
brought to the attention of the commission, it will be given an appropriate
acreage assignment.
(c) Development to final density. An
application to drill a well for oil, gas, or geothermal resource on a drilling
unit composed of surplus acreage, commonly referred to as the "tolerance well,"
may be granted as regular when the operator seeking such permit certifies to
the commission in a prescribed form the necessary data to show that such permit
is needed to develop a lease, pooled unit, or unitized tract to final density,
and only in the following circumstances:
(1)
when the amount of surplus acreage equals or exceeds the maximum amount
provided for tolerance acreage by special or county regular rules for the
field, provided that this paragraph does not apply for a lease, pooled unit, or
unitized tract that is completely developed with optional units and the special
or county regular rules for the field do not have a tolerance provisions
expressly made applicable to optional proration units;
(2) if the special or county regular rules
for the field do not have a tolerance provision expressly made applicable to
optional proration units, when the amount of surplus acreage equals or exceeds
one-half of the smallest amount established for an optional drilling unit;
or
(3) if the applicable rules for
the field do not have a tolerance provision for the standard drilling or
proration unit, when the amount of surplus acreage equals or exceeds one-half
the amount prescribed for the standard unit.
(d) Applications involving the voluntary
subdivision rule.
(1) Density exception not
required. An exception to the minimum density provision is not required for the
first well in a field on a lease, pooled unit, or unitized tract composed of
substandard acreage, when the leases, or the drillsite tract of a pooled unit
or unitized tract:
(A) took its present size
and shape prior to the date of attachment of the voluntary subdivision rule
(§
RSA
3.37<subdiv>(g)</subdiv> of this
title (relating to Statewide Spacing Rule)); or
(B) took its present size and shape after the
date of attachment of the voluntary subdivision rule (§
RSA
3.37<subdiv>(g)</subdiv> of this
title (relating to Statewide Spacing Rule)) and was not composed of substandard
acreage in the field according to the density rules in effect at the time it
took its present size and shape.
(2) Density exception required. An exception
to the density provision is required, and may be granted only to prevent waste,
for a well on a lease, pooled unit, or unitized tract that is composed of
substandard acreage and that:
(A) took its
present size and shape after the date of attachment of the voluntary
subdivision rule (§
RSA
3.37<subdiv>(g)</subdiv> of this
title (relating to the Statewide Spacing Rule)); and
(B) was composed of substandard acreage in
the field according to the density rules in effect at the time it took its
present size and shape.
(3) Unit dissolution.
(A) If two or more separate tracts are joined
to form a unit for oil or gas development, the unit is accepted by the
Commission, and the unit has produced hydrocarbons in the preceding twenty (20)
years, the unit may not thereafter be dissolved into the separate tracts with
the rules of the commission applicable to each separate tract if the
dissolution results in any tract composed of substandard acreage for the field
from which the unit produced, unless the Commission approves such
dissolution.
(B) The Commission
shall grant approval only after application, notice, and an opportunity for
hearing. The applicant seeking the unit dissolution shall provide a list of the
names and addresses of all current lessees and unleased mineral interest owners
of each tract within the joined or unitized tract at the time the application
is filed. The Commission shall give notice of the application to all current
lessees and unleased mineral interest owners of each tract within the joined or
unitized tract. Additionally, if one or more wells on the unitized tract has
produced from the field within the 12-month period prior to the application,
the applicant shall include on the list all affected persons described in
subsection (h)(1)(A) of this section, and the Commission shall give notice of
the application to these affected persons.
(C) A Commission designee may grant
administrative approval if the Commission designee determines that granting the
application will not result in the circumvention of the density restrictions of
this section or other Commission rules, and if either:
(i) written waivers are filed by all affected
persons; or
(ii) no protest is
filed within the time set forth in the notice of application.
(e)
Application involving unitized areas with entity for density orders. An
exception to the minimum density provision is not required for a well in a
unitized area for which the commission has granted an entity for density order,
if the sum of all applied for, permitted, or completed producing wells in the
field within the unitized area, multiplied by the applicable density provision,
does not exceed the total number of acres in the unitized area. The operator
must indicate the docket number of the entity for density order on the
application form.
(f) Exceptions to
density provisions authorized. The Commission, or Commission designee, in order
to prevent waste or, except as provided in subsection (d)(2) of this section,
to prevent the confiscation of property, may grant exceptions to the density
provisions set forth in this section. Such an exception may be granted only
after notice and an opportunity for hearing.
(g) Filing requirements.
(1) Application. An application for permit to
drill shall include the fees required in §
RSA
3.78 of this title (relating to Fees and
Financial Security Requirements) and shall be certified by a person acquainted
with the facts, stating that all information in the application is true and
complete to the best of that person's knowledge.
(2) Plat. When filing an application for an
exception to the density requirements of this section, in addition to the plat
requirements in §
RSA
3.5 of this title (relating to Application to
Drill, Deepen, Reenter, or Plug Back) (Statewide Rule 5), the applicant shall
attach to each copy of the application a plat that:
(A) depicts the lease, pooled unit, or
unitized tract, showing thereon the acreage assigned to the drilling unit for
the proposed well and the acreage assigned to all current applied for,
permitted, or completed oil, gas, or oil and gas wells in the same field or
reservoir which are located within the lease, pooled unit, or unitized
tract;
(B) on large leases, pooled
units, or unitized tracts, if the established density is not exceeded as shown
on the face of the application, outlines the acreage assigned to the well for
which the permit is sought and the immediately adjacent wells on the lease,
pooled unit, or unitized tract;
(C)
on leases, pooled units, or unitized tracts from which production is secured
from more than one field, outlines the acreage assigned to the wells in each
field that is the subject of the current application;
(D) corresponds to the listing required under
subsection (g)(1)(A) of this section.
(E) is certified by a person acquainted with
the facts pertinent to the application that the plat is accurately drawn to
scale and correctly reflects all pertinent and required data.
(3) Substandard acreage. An
application for a permit to drill on a lease, pooled unit, or unitized tract
composed of substandard acreage must include a certification in a prescribed
form indicating the date the lease, or the drillsite tract of a pooled unit or
unitized tract, took its present size and shape.
(4) Surplus acreage. An application for
permit to drill on surplus acreage pursuant to subsection (c) of this section
must include a certification in a prescribed form indicating the date the
lease, pooled unit, or unitized tract took its present size and
shape.
(5) Certifications.
Certifications required under paragraphs (3) and (4) of this subsection shall
be filed on Form W-1A, Substandard Acreage Certification.
(A) The operator shall file the Form W-1A
with the drilling permit application and shall indicate the purpose of filing.
The operator shall accurately complete all information required on the form in
accordance with instructions on the form.
(B) The operator shall list the field or
fields for which the substandard acreage certification applies in the
designated area on the form. If there are more than three fields for which the
certification applies, the operator shall attach additional Forms W-1A and
shall number the additional pages in sequence.
(C) The operator shall file the original Form
W-1A with the Commission's Austin office and a copy with the appropriate
district office, unless the operator files electronically.
(D) The operator or the operator's agent
shall certify the information provided on the Form W-1A is true, complete, and
correct by signing and dating the form, and listing the requested
identification and contact information.
(E) Failure to timely file the required
information on the appropriate form may result in the dismissal of the
application.
(h) Procedure for obtaining exceptions to the
density provisions.
(1) Filing requirements.
If a permit to drill requires an exception to the applicable density provision,
the operator must file, in addition to the items required by subsection (g) of
this section:
(A) a list of the names and
addresses of all affected persons. For the purpose of giving notice of
application, the Commission presumes that affected persons include the
operators and unleased mineral interest owners of all adjacent offset tracts,
and the operators and unleased mineral interest owners of all tracts nearer to
the proposed well than the prescribed minimum lease-line spacing distance. The
Commission designee may determine that such a person is not affected only upon
written request and a showing by the applicant that:
(i) competent, convincing geological or
engineering data indicate that drainage of hydrocarbons from the particular
tracts subject to the request will not occur due to production from the
proposed well; and
(ii) notice to
the particular operators and unleased mineral interest owners would be unduly
burdensome or expensive;
(B) engineering and/or geological data,
including a written explanation of each exhibit, showing that the drilling of a
well on substandard acreage is necessary to prevent waste or to prevent the
confiscation of property;
(C)
additional data requested by the Commission designee.
(2) Notice of application. Upon receipt of a
complete application, the Commission will give notice of the application by
mail to all affected persons for whom signed waivers have not been submitted.
If, after diligent efforts, the applicant is unable to ascertain the name and
address of one or more persons required by this subsection to be notified, then
the applicant shall notify such persons by publishing notice of the application
in a form approved by the Commission. The applicant shall publish the notice
once each week for two consecutive weeks in a newspaper of general circulation
in the county where the well will be located. The first publication shall be
published at least 14 days before the protest deadline in the notice of
application. The applicant shall file with the Commission a publisher's
affidavit or other evidence of publication.
(3) Approval without hearing. If the
Commission designee determines, based on the data submitted, that a permit
requiring an exception to the applicable density provision is justified
according to subsection (f) of this section, then the Commission designee may
issue the exception permit administratively if:
(A) signed waivers from all affected persons
were submitted with the application; or
(B) notice of application was given in
accordance with this subsection and no protest was filed within 21 days of the
notice; or
(C) no person appeared
to protest the application at a hearing scheduled pursuant to paragraph (4)(A)
of this subsection.
(4)
Hearing on the application.
(A) If a written
protest is filed within 21 days after the notice of application is given in
accordance with paragraph (2) of this subsection, the application will be set
for hearing.
(B) If the application
is not protested and the Commission designee determines that a permit requiring
an exception to the applicable density provision is not justified according to
subsection (f) of this section, the operator may request a hearing to consider
the application.
(i) Duration. A permit is issued as an
exception to the applicable density provision shall expire two years from the
effective date of the permit; unless drilling operations are commenced in good
faith within the two year period.
(j) The requirements for density exceptions
for wells in a designated unconventional fracture treated (UFT) field are set
forth in §
RSA
3.86<subdiv>(k)</subdiv> of this
title (relating to Horizontal Drainhole Wells).