Current through Reg. 50, No. 13; March 28, 2025
(a) An operator may
pool acreage, in accordance with appropriate contractual authority and
applicable field rules, for the purpose of creating a drilling unit or
proration unit by filing an original certified plat delineating the pooled unit
and a Certificate of Pooling Authority, Form P-12, according to the following
requirements:
(1) Each tract in the certified
plat shall be identified with an outline and a tract identifier that
corresponds to the tract identifier listed on Form P-12.
(2) The operator shall provide information on
Form P-12, accurately and according to the instructions on the form.
(A) The operator shall separately list each
tract committed to the pooled unit by authority granted to the
operator.
(B) For each tract listed
on Form P-12, the operator shall state the number of acres contained within the
tract. The operator shall indicate by checking the appropriate box on Form P-12
if, within an individual tract, there exists a non-pooled and/or unleased
interest.
(C) The operator shall
state on Form P-12 the total number of acres in the pooled unit. The total
number of acres in the pooled unit shall equal the sum of all acres in each
tract listed. The total acreage shown on Form P-12 shall only include tracts in
which the operator holds a leased or ownership interest in the minerals or
other contractual authority to include the tract in the pooled unit.
(D) If a pooled unit contains more tracts
than can be listed on a single Form P-12, the operator shall file as many
additional Forms P-12 as necessary to list each pooled tract individually. The
additional Forms P-12 shall be numbered in sequence.
(E) The operator shall provide the requested
identification and contact information on Form P-12.
(F) The operator shall certify the
information on Form P-12 by signing and dating the form.
(3) Failure to timely file the required
information on the certified plat or Form P-12 may result in the dismissal of
the W-1 application. "Timely" means within three months of the Commission
notifying the operator of the need for additional information on the certified
plat and/or Form P-12.
(4) The
operator shall file Form P-12 and a certified plat in the following instances:
(A) with the drilling permit application when
two or more tracts are joined to form a pooled unit for Commission
purposes;
(B) with the initial
completion report if any information reported on Form P-12 has changed since
the filing of the drilling permit application;
(C) to designate a pooled unit formed after a
completion report has been filed; or
(D) to designate a change in a pooled unit
previously recognized by the Commission. The operator shall file any changes to
a pooled unit in accordance with the requirements of §
3.38(d)(3) of
this title (relating to Well Densities).
(b) If a tract to be pooled has an
outstanding interest for which pooling authority does not exist, the tract may
be assigned to a unit where authority exists in the remaining undivided
interest provided that total gross acreage in the tract is included for
allocation purposes, and the certificate filed with the Commission shows that a
certain undivided interest is outstanding in the tract. The Commission may not
allow an operator to assign only the operator's undivided interest out of a
basic tract where a nonpooled interest exists.
(c) The nonpooled undivided interest holder
retains the development rights in the basic tract. If the development rights
are exercised, the Commission grants authority to develop the basic tract, and
the well is completed as a producing well on the basic tract, then the entire
interest in the basic tract and any interest pooled with another tract shall be
assigned to the well on the basic tract for allocation purposes. Splitting of
an undivided interest in a basic tract between two or more wells on two or more
tracts is not acceptable.
(d)
Multiple assignment of acreage is not permitted, except as provided in
subsection (e) of this section. Multiple assignment of acreage is defined as
the assignment of the same surface acreage to more than one well in a field.
However, this limitation shall not prevent the reformation of development or
proration units so long as:
(1) no multiple
assignment of acreage occurs; and
(2) such reformation does not violate other
conservation regulations.
(e) In unconventional fracture treated (UFT)
fields defined in §
3.86 of this title (relating to
Horizontal Drainhole Wells), multiple assignment of acreage is permissible as
follows:
(1) Assignment of acreage to both a
horizontal well and a vertical well for drilling and development or for
allocation of allowable is permissible. The field density rules apply
independently to horizontal wells and vertical wells. Acreage assigned to
horizontal wells shall not count against acreage assigned to vertical wells,
and acreage assigned to vertical wells shall not count against acreage assigned
to horizontal wells.
(A) Acreage assigned to
horizontal wells for drilling and development or for allocation of allowable
shall be permissible so long as the horizontal well density complies with
§
3.38 of this title and/or special
field rules, as applicable. For the purposes of this section, stacked lateral
wells as defined in §
3.86(a)(10) of
this title are not considered assignment of acreage to multiple horizontal
wells.
(B) Acreage assigned to
vertical wells for drilling and development or for allocation of allowable
shall be permissible so long as the vertical well density complies with §
3.38 of this title and/or special
field rules, as applicable.
(2) Where ownership of the right to drill or
produce from a tract in a UFT field is divided horizontally, acreage may be
assigned to more than one well provided that the wells having the same wellbore
profile are not completed in the same ownership interval. For purposes of this
section "divided horizontally" means that ownership of the right to drill or
produce has been separated into depth intervals defined by total vertical
depth, depth relative to a specific geological contact, or some other
discriminator. A tract may be "divided horizontally" even where one operator
has the right to drill or produce multiple intervals on the same tract of land
in the same field.
(A) To apply for multiple
assignment of acreage under this subsection, the operator's drilling permit
application shall indicate the upper and lower limits of the operator's
ownership interval. The interval shown on the drilling permit application is
measured as the total vertical depth from the surface.
(B) No more than 15 days prior to filing its
drilling permit application, the applicant shall identify any well, including
any wells permitted but not yet drilled or completed, that is located within
one-half mile of the applicant's proposed wellbore between the first and last
take points and, upon identification of all applicable wells, send written
notice of its application to the P-5 address of record of the
Commission-designated operator of the wells determined to fall within the
one-half mile radius. The applicant shall attach to the notice a certified plat
that clearly depicts the projected path of the wellbore and the one-half mile
radius surrounding the wellbore from the first take point to the last take
point. Copies of the notice, service list, and certified plat shall be filed
with the drilling permit application.
(C) If any person entitled to notice under
this subsection did not receive notice, that person may request a hearing. If
the Commission determines at a hearing that the applicant did not provide the
notice as required by this subsection, the Commission may cancel the
permit.
(D) To mitigate the
potential for wellbore collisions, the applicant shall provide copies of any
directional surveys to the persons entitled to notice under this subsection,
upon request, within 15 days of the applicant's receipt of a request.
(E) Where ownership of the right to drill or
produce from a tract in a UFT field is divided horizontally, the field density
rules for the field will apply separately to each ownership interval, such that
proration units on a tract above and below a division of ownership are
accounted for separately.
(F) Field
rules that allow assignment of acreage to more than one well in UFT fields are
superseded by this rule amendment, as of the effective date of this amendment,
March 3, 2020. If, prior to the effective date of this amendment, an operator
has assigned acreage to more than one well pursuant to previous field rules,
such multiple assignment remains valid. After March 3, 2020, multiple
assignment of acreage is not permissible unless the applicant complies with the
requirements of this subsection. The Commission will not consider any
applications for field rules regarding multiple assignment of acreage in UFT
fields until two years after March 3, 2020.
(3) Upon request by the Commission, an
operator shall provide non-confidential information verifying that the well was
completed in the interval indicated on its drilling permit
application.
(f) Upon an
operator's written request and for good cause shown, the director or the
director's delegate may resolve an existing instance of multiple assignment of
acreage. If such a request is administratively denied, the operator shall have
a right to request a hearing to review the denial.
(g) If an operator does not qualify for
multiple assignment of acreage under subsection (e) of this section, acreage
cannot be assigned to more than one well unless the operator is granted an
exception after a public hearing held after notice to all persons described in
paragraph (2) of this subsection.
(1) An
operator applying for an exception must show:
(A) an exception is necessary to prevent
waste, prevent confiscation, or protect correlative rights; and
(B) the wells are not completed in the same
ownership interval.
(2)
If an exception is sought for a well in a UFT field, the operator shall file
with its application for an exception the names and mailing addresses of
persons described in §3.86(k)(2), relating to Horizontal Drainhole Wells.
If an exception is sought for any other well, the operator shall file with its
application for an exception the names and mailing addresses of all 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. In
the event the applicant is unable after due diligence to locate the whereabouts
of any person to whom notice is required by this subsection, the applicant
shall publish notice of this application pursuant to §
1.43 of this title (relating to
Notice by Publication).
(3) To
mitigate the potential for wellbore collisions, the applicant shall provide
copies of any directional surveys to the persons entitled to notice under this
subsection, upon request, within 15 days of the applicant's receipt of a
request.
(h) If an
offset, overlying, or underlying operator, or a lessee or unleased mineral
interest owner determines that any operator has assigned identical acreage to
two or more concurrently producing wells in violation of this section, the
operator or owner may file a complaint with the Hearings Division to request
that a hearing be set to consider the issues raised in the complaint. If the
Commission determines after a hearing on the complaint that acreage has been
assigned in violation of this section, the Commission may curtail or cancel the
allowable production rate for any affected wells and/or may cancel the
Certificate of Compliance (Form P-4) for any affected wells for failure to
comply with this section.
(i) An
operator shall file Form P-16, Acreage Designation, with each drilling permit
application and with each completion report for horizontal wells in any field
and for all wells in designated UFT fields as defined in §
3.86 of this title. An operator
assigning surface acreage to more than one well pursuant to subsection (g) of
this section shall file Form P-16, Acreage Designation, with each drilling
permit application and with each completion report. The operator may file Form
P-16 with each drilling permit application and with each completion report for
all other wells. The operator may also file proration unit plats for individual
wells in a field.
