Texas Administrative Code
Title 16 - ECONOMIC REGULATION
Part 1 - RAILROAD COMMISSION OF TEXAS
Chapter 3 - OIL AND GAS DIVISION
Section 3.40 - Assignment of Acreage to Pooled Development and Proration Units
Current through Reg. 49, No. 12; March 22, 2024
(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:
(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:
(e) In unconventional fracture treated (UFT) fields defined in § RSA 3.86 of this title (relating to Horizontal Drainhole Wells), multiple assignment of acreage is permissible as follows:
(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.
(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 § RSA 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.