A. Upon discovery of each new field or pool,
the Commission shall assign to it a name consisting of:
(1) A landmark designation with appropriate
directional symbol; and
(2) The
geologic name of the producing reservoir.
B. The Commission shall classify, and
reclassify, the oil pools of the State, in the following categories:
(1) Pools on Temporary Allowable;
(2) Prorated Pools; and
(3) Pools under Pressure Maintenance or
Secondary Recovery.
The Commission shall classify and reclassify the gas pools of the
State in the following categories:
(1)
Dry Gas Pools;
(2) Gas Condensate
Pools; and
(3) Gas Condensate Pools
under Cycling.
C. Each well completed which discovers a new
pool may, upon approval by the Commission, be assigned a temporary allowable,
not subject to market demand, and determined by the Commission to be reasonable
and to prevent waste. The temporary allowable shall be assigned to all
subsequent wells completed in said pool until a specified time as determined by
the Commission, has elapsed from the date of completion of the discovery well.
Subsequently, the pool shall enter the classification of a prorated pool.
A well discovering more than one new pool shall be entitled to a
temporary allowable in each new pool, provided the well is completed to produce
from such new pool prior to the time such pool is reclassified as a prorated
pool.
At the same time as a temporary allowable is assigned to any
well, the Commission may issue an order promulgating temporary field rules for
such new pool, including a rule providing for well spacing so that in the early
stage of development of such pool no unnecessary wells may be drilled, and the
limit and characteristics of the reservoir and its fluid content may be
determined with the least number of wells in the shortest possible time.
An operator desiring a temporary allowable shall furnish the
Commission the following:
(1) An
electric log or radioactivity log of the well in question, if taken;
(2) A map of the area, including the location
of all oil and gas wells within the pool being produced by the subject well;
showing total depth of such wells, and whether dry or productive, name of the
producing interval, and the top and bottom of such interval;
(3) An affidavit setting out the following:
(a) The exact location of the well (legal
description);
(b) The lease
name;
(c) The suggested pool name
(to include the producing interval);
(d) The top and bottom depths of the
producing interval;
(e) The results
of production tests and/or GOR tests;
(f) The date of first production;
(g) The names and addresses of the purchasers
to whom oil is to be delivered;
(h)
The name and address of each operator within one-half ( 1/2) mile of the well
and an affidavit that notice in writing of the request for the temporary
allowable was mailed to each operator named;
(i) A description of onsite storage
facilities and means of transporting the produced oil or gas; and
(j) Any other data the Commission may deem
pertinent, such as bottom hole pressure, core data, etc.
Prior to termination of the temporary allowable status of a pool,
the Commission may require the submission of all reservoir data obtained and
will hold a hearing to secure further evidence and the recommendations of
operators for the future operations of such pool.
D. The Commission, after notice
and hearing, may assign a temporary allowable to any well or promulgate
temporary field rules for any new pool, based upon review of all known relevant
information including, but not limited to the following: chemical composition
of the production; size of the tract; distance of the well from property lines;
information submitted to the Commission pursuant to (C) above; and any proposed
allowable or field rules suggested by the operator. The Commission will
exercise its discretion in establishing a temporary allowable or temporary
field rules consistent with one of the three alternative methods for
establishing temporary drilling units, as follows:
(1) Establishment of statewide spacing
standards. Such standards and temporary allowables shall be determined with
reference to a state-wide grid system suitable to this State. The Commission
shall also consider the type of production, depth of production, well spacing,
and producing practices.
(2) Test
period and shut-in. This method authorizes a test period of between thirty (30)
to ninety (90) days prior to the shutting-in of the well. During the shut-in
period, the Commission will adopt temporary field rules, specifying unit size,
allowables, well spacing, and production practices.
(3) Production on a lease basis. This method
authorizes a well to be drilled and produced on a lease basis, according to
state-wide rules concerning well spacing, allowables, and production practices.
The operator of each new well brought on to production shall file
a production test with the Commission not later than thirty (30) days after
completion of the well. Each individual well will be tested for not less than
six (6) hours, and not more than twenty-four (24) hours, and the production
reported at a daily rate (24 hours). The test may be witnessed by a
representative of the Commission.
E. The Commission shall encourage and may
exercise the authority, in its discretion, to order a pool-wide unit under the
following circumstances:
(1) It is
demonstrated to the Commission that a pool-wide unit is the best way to develop
the pool and to achieve maximum efficiency;
(2) To maintain the pressure of the reservoir
after it is fully developed;
(3)
Secondary or other enhanced recovery methods are utilized; and
(4) Any other reason or good cause shown by
the Commission that units on the pool should be on a pool-wide basis.
The Commission shall issue an order establishing a pool-wide unit
after notice and hearing. After such notice and hearing, the Commission shall
assign a pool-wide allowable. In determining the total pool allowable the
following factors shall be considered:
(a) Productive capacity of the wells in said
pool;
(b) Effective pay thickness
of the producing zones;
(c) Size
and content of the reservoir; and
(d) Reservoir performance, including the
bottom hole pressure, gas-oil ratios, average depth of the pay zone, type of
drive, permeability, water encroachment and water production, porosity,
productivity indices and proper withdrawal rates from the reservoir as a whole.
The total pool allowable shall then be distributed to each
separate leasehold or pooled unit so as to allow each tract an opportunity to
produce ultimately the liquid hydrocarbons which underlie it. In allocating oil
allowables to pools, the Commission will have the right to consider nominations
of purchasers.
F. When it is shown that no avoidable waste
or violation of correlative rights will result, the Commission may authorize
the operation of a pool under a limiting gas-oil ratio in excess of 2,000 cubic
feet of gas per barrel of oil produced.
Any oil well producing with a gas-oil ratio in excess of two
thousand (2,000) cubic feet of gas per barrel of oil produced shall be allowed
to produce daily only that volume of gas obtained by multiplying its top daily
oil allowable, which could have been assigned to such well prior to application
of this rule, by two thousand (2,000). The gas volume thus obtained shall be
known as the daily gas limit of the well. The daily oil allowable of the well
shall then be determined by dividing its daily gas limit, obtained as herein
provided, by its producing gas-oil ratio in cubic feet per barrel of oil
produced.
Any gas well producing from the same reservoir in which oil wells
are completed and producing shall be allowed to produce daily only that amount
of gas which is the volumetric equivalent in reservoir displacement of the gas
and oil produced from the oil well in the reservoir that withdraws the maximum
amount of gas in the production of its daily oil allowable.
If gas produced from an oil reservoir is returned to the same
reservoir from which it was produced, only the volume of gas not returned to
the reservoir shall be considered in applying the rule stated.
G. All gas wells shall be tested
initially and annually unless otherwise waived by the Commission. Proration of
gas production and/or the establishment of maximum allowable withdrawal rates
shall be determined by use of appropriate procedures of the Interstate Oil
Compact Commission's "Manual of Back Pressure Testing of Gas Wells" or
Commission approved improvements, modifications, or substitutes.
H. Whenever necessary to assure the equitable
taking of gas from a pool, or to prevent waste, the Commission, after notice
and hearing, shall regulate the taking of gas from such pool by establishing a
reasonable and equitable allocation formula with which to allocate production
among wells.
I. Special field rules
adopted for such pool shall provide that the total gas allowable of the pool
shall be distributed among the separate leasehold or pooled units in said pool
so as to allow each tract an opportunity to produce ultimately the gaseous
hydrocarbons which underlie it.
J.
Before gas from a non-associated gas pool may be utilized for production of
carbon black, a special permit must be obtained for such use from the
Commission.
K. Operators of wells
and pools capable of producing carbon dioxide, nitrogen, hydrogen sulfide, or
other gases, or combinations thereof, shall be required to secure approval of
operating practices from the Commission.
L. Upon granting of an exception to well
spacing required by these regulations, or in a special field rule, promulgated
by the Commission, and it appearing that such exception location gives the
applicant more than his just and equitable share of the hydrocarbons in the
reservoir, the agency shall take such action, by allowable penalty or
otherwise, as to offset the advantage over other owners in the pool occasioned
by the granting of the exception location, after notice and hearing. In
addition, whenever exceptional location is granted, a directional survey must
be conducted and the results must be reported to the Commission.
M. If a prorated gas or oil well, or
leasehold, during the proration period determined by the Commission, does not
produce as much oil or gas as is allocated to it by the order of the
Commission, the operator of the well, or leasehold, shall be permitted to carry
such underproduction forward to the next succeeding balancing period, as future
allowable credit to be produced during that period.
N. No gas or oil well, or leasehold, shall be
overproduced, except by order of the Commission. All other overproduction,
during the proration period determined by the Commission, shall be deducted
from the lease allowable for the second succeeding proration period.
O. The commission, upon application, notice
and hearing, may permit the transfer of an allowable of a high gas-oil ratio or
high water-oil ratio well, after proper adjustment, partially or entirely to
any other well or wells on the same lease having a lower gas-oil ratio or
water-oil ratio, producing from the same common source of supply.