1. Prior to the
commencement of drilling, deepening or plugging back of any well, exploratory
drilling such as core holes and stratigraphic test holes, or any surface
disturbance associated with these activities, the owner shall submit a
completed APD to the division and obtain approval by the division. Except as
provided in Subsections (4), (5) and (11) below, only APDs submitted by an
owner qualifying as a designated operator shall be approved by the
division.
2. The following
information shall be included for a completed APD:
2.1. The name, address, telephone number, and
electronic contact information of the owner;
2.2. Proper identification of any relevant
oil and gas leases, including identification of whether the leases are state,
federal, Indian, or fee;
2.3.
Proper identification of the federal or state unit, if the well is located
within a federal or state unit.
2.4. A plat or map prepared by a licensed
surveyor or engineer that accurately provides:
(a) the proposed well's surface and terminus
location as perpendicular distances from Public Land Survey System (PLSS)
section lines;
(b) the PLSS
quarter-section or lot, section, township, range, and principal meridian where
the proposed well is to be located;
(c) bearings and distances of any pertinent
PLSS section lines;
(d) bearing and
distance from the proposed well's surface to the proposed well's terminus
location; and
(e) latitude and
longitude coordinates of the proposed well's surface and terminus location,
with any provided bearings, distances, and coordinates conforming to a
coordinate reference system having datum, north reference, and measurement
units acceptable to the division;
2.5. A copy of the Division of Water Rights
approval, or the identifying number of approval, for use of water at the
drilling site;
2.6. A drilling
program containing the following information:
2.6.1. The estimated tops of important
geologic markers;
2.6.2. The
estimated depths at which the top and the bottom of anticipated water, oil,
gas, or other mineral-bearing formations are expected to be encountered, and
the plans for protecting such resources;
2.6.3. The minimum specifications for
pressure control equipment to be used and a schematic diagram thereof showing
sizes, pressure ratings or API series, proposed testing procedures and testing
frequency;
2.6.4. Any supplementary
information more completely describing the drilling equipment and casing
program;
2.6.5. The type and
characteristics of the proposed circulating medium to be employed in drilling,
the quantities and types of mud and weighting material to be maintained, and
the monitoring equipment to be used on the mud system;
2.6.6. The anticipated type and amount of
testing, logging, and coring;
2.6.7.
The expected bottom hole pressure and any anticipated abnormal pressures or
temperatures or potential hazards, such as hydrogen sulfide, that are expected
to be encountered, along with contingency plans for mitigating such identified
hazards;
2.6.8. Any other relevant
or unique information regarding the proposed oil and gas operations that would
assist the division's assessment and consideration of the application;
and
2.6.9. If an APD is for a
proposed horizontal or directional well, a horizontal or directional well
diagram clearly showing the well bore path, including the distance and bearing
from the surface through the terminus of the lateral, the target location
within the intended producing interval, a justification for any intentional
deviation, and evidence that the written consent of the affected owners has
been obtained, if required under other provisions of
R649-3;
2.7. A se l f
-certification from the owner, evidenced by an affidavit or declaration in
conformity with Section
78B-18a-101, et seq., that
the owner satisfies the criteria set forth in Subsection
R649-2-4(1) or
(2);
2.8. If the well will be located on the
surface of state or fee lands, an APD will not be approved until an Onsite
Predrill Evaluation is performed as outlined in Subsection
R649-3-18.
3. The division shall approve the APD if it
finds the APD to be complete and otherwise in accordance with the rules of the
division and orders of the board. Notice of the approval shall be posted on the
division's website in a readily accessible and clearly identifiable
format.
4. After an APD is
approved, a non-applicant working interest owner within the drilling unit; or
in the absence of a board order establishing a drilling unit, a non-applicant
owner who has either:
(a) a working interest
in a lease covering the lands in which the well will physically penetrate and
in the targeted formations from which the well will produce; or
(b) owns any unleased oil and gas in the
lands which the well will physically penetrate and in the targeted formations
from which the well will produce, may protest the APD approval and designation
of operator by filing a request for agency action with the board within ten
calendar days of the electronic posting of the approved APD by the division on
its website in accordance with Section
R649-2-4(3);
provided, if a lease or contract to acquire a lease will expire before the
10-day period expires, the division may, in its sole discretion, shorten the
10-day period upon written application of the operator outlining those
circumstances and providing a copy of the expiring lease or contract.
4.1. The basis for the protest shall be
limited to the following grounds:
(a) the
designated operator's inability to timely, efficiently, effectively, and
economically develop the drilling unit,
(b) failure by the designated owner to
satisfy any of the required criteria for designation of an operator as set
forth in
R649-2-4;
or
(c) a non-applicant working
interest owner who can demonstrate good cause for drilling an alternate
well.
4.2. Upon the
timely filing of a request for agency action protesting an approved APD, the
approved APD and any actions related to preparation for drilling shall be
stayed pending resolution by the board.
4.3. Any activity commenced after the an
approved APD has been electronically posted by the division but before the ten
calendar day period has expired, will not constitute a violation of the APD,
but will be at the designated operator's sole risk and expense, shall not
confer any implied or express rights with respect to operatorship designation,
and shall not be deemed preparation for drilling purposes of Section
R649-2-4.
5. In the absence of a JOA, or when a JOA is
imposed by the board pursuant to Section
40-6-6.5(2),
and when good cause exists, an owner may file a request for agency action
seeking board approval to drill a proposed well when the designated operator
has refused to file an APD or drill the proposed well. If the request for
agency action is granted by the board, the division may then approve an APD
submitted by the non-designated operator owner if the division finds the APD to
be complete and otherwise filed in accordance with the rules of the division
and orders of the board.
6. A well
will be assigned an API number by the division. The API number should be used
to identify the permitted well in any future correspondence with the division.
Unless otherwise revoked, approval of the APD shall be valid for a period of
twelve months from the date the APD was electronically posted on the division's
website.
7. If a change of well
location or drilling program is desired, an amended APD shall be timely filed
with the division and its approval obtained before preparation for drilling
occurs at the alternate location. If the APD has already been approved, the
requested change should be submitted via sundry notice and approved through the
division's ePermit system.
8. After
a well has been completed or plugged and abandoned, it shall not be reentered
without the operator first submitting a new APD and obtaining the division's
approval. The division will grant approval if the designated operator provides
evidence that the appropriate bond has been furnished or waived, as required by
Section
R649-3-1, and the
contemplated work or operations is not in violation of any rule or order of the
board.
9. A designated operator who
applies for an APD in an area not subject to an order of the board establishing
a drilling unit, may contemporaneously or subsequently file a request for
agency action to establish a drilling unit for the subject area not to exceed
the area reasonably projected by the operator or owner to be underlaid by the
targeted reservoir.
10. Any
application for an APD and any actions related to preparation for drilling
shall be stayed pending final determination of any request for agency action
filed by an interested person, when the request is the establishment of a
drilling unit or for the modification of existing drilling units for the
spacing of wells.
11. If the other
conditions required for a completed APD have been fulfilled, an exception to
Subsection R649-3-4(10) shall be made and an APD shall be approved by the
division if the designated operator files a self-certification, evidenced by an
affidavit or declaration in conformity with Section
78B-18a-101, et seq.,
demonstrating that on or after the date the request for agency action:
(i) the designated operator has the right or
obligation under the terms of an existing contract to drill the requested well;
or
(ii) the owner or designated
operator has a leasehold estate or right to acquire a leasehold estate under a
contract that will be terminated unless they are permitted to commence the
drilling of the required well before the matter can be fully heard and
determined by the board.
