Tenn. Comp. R. & Regs. 0400-52-02-.02 - DRILLING PERMIT

(1) Applications for a permit to drill a well for oil and gas shall be made on Application for Permit to Drill (Form CN-0211) and submitted to the Supervisor's office for approval. The application shall be accompanied by a copy of a location plat, bond, Organization Report (Form CN-0219) and a fee of five hundred dollars ($500). The application shall give the name and address of the drilling contractor, if known; otherwise notification shall be made by letter to the Supervisor as soon as determined. Information submitted with the application shall include the intent to fracture the well, as well as an estimate of the volume of fluids to be used to fracture. The application shall also include a plan for erosion control, prevention of pollution of surface waters, and reclamation of all areas disturbed by the operations, including access roads. The plan shall conform to the requirements of Rule 0400-52-09-.05. The plan shall be sufficiently detailed to allow a gas and oil field inspector to locate the site of the facilities to be constructed and estimate the expected environmental impact, but does not have to include detailed engineering design drawings. The plan shall also include identification of all drinking water wells within a ¼ mile radius of the proposed wellhead, except where a ½ mile radius is required, as specified in paragraph (10) of Rule 0400-52-02-.01. The Supervisor may require modifications in the operator's plan if such modifications are necessary to prevent pollution or to promote reclamation. Upon approval, the operator's plan shall be a condition of the permit. Failure to comply with the plan shall be grounds for revocation of the permit and forfeiture of the bond.

(2) A drilling permit shall be amended by filing an Application to Amend Well Permit (Form CN-0228) with the Supervisor and paying a fee of $100 if the well name, number, elevation, location, or proposed total depth is changed. If the well location is changed, 1 copy of a revised survey plat shall be filed with the application. The amended permit is subject to the same terms and conditions as a well permit, including erosion control requirements. A person who is granted a drilling permit can only transfer the permit and attendant rights to another person after submitting an Application to Change Operators (Form CN-237) and receiving approval of the application from the Supervisor. The person to whom the permit is being transferred shall file an Organization Report (Form CN-0219), post a well plugging bond and a reclamation bond, if needed, and pay a fee of $100. The transfer of a permit from the original permittee to another operator, with or without the approval of the Supervisor, does not relieve the original permittee of obligations occurring before the transfer, and the bond shall not be released until all material at the time of transfer has been submitted. Unless change of operator forms have been processed or approved by the office of the Supervisor, any operation conducted on the well in question is the responsibility of the original permittee, and his bond shall not be released until all State requirements have been met.

(a) If an Application to Change Operators (Form CN-0237) is to be submitted without the signature of the current permittee, it shall be considered a forced change of operator, then the following items shall also be submitted:

1. Copy of the lease and assignments, if any, under which the permit was originally issued, or subsequently transferred, if those documents are available, or an affidavit from the landowner that no prior oil and gas leases are still active. An affidavit from the original landowner that there are no other unexpired oil and gas leases, if the title to the land has changed hands since the Department issued the permit on the land in question, or, if the original landowner cannot be located, an affidavit by the new operator or his agent that he has checked the grantor index in the register's office and found no unexplained conveyance of the oil and gas rights by the original landowner.

2. Copy of the lease and assignments, if any, under which the permit shall be transferred to the new operator.

3. Copy of a certified letter to the current permittee requesting that an Application to Change Operators (Form CN-0237) be signed, and also stating that if the application is not signed, and no written objection to a change of operator without that signature is submitted to the Department in writing within 10 working days of receipt of said letter, the new operator shall seek approval from the Department of that Approval to Change Operators without said signature. In addition, the applicant shall send the certified mail notice to the current address that is registered with the Board or the Department as shown on the Organization Report (Form CN-0219).

4. A copy of a Court Order relative to the inactive or expired status of any prior oil and gas leases may be submitted in lieu of the items mentioned in parts 2. and 3. of this subparagraph.

5. If a written objection to approving the Application to Change Operators (Form CN-0237) is properly submitted to the Department, the staff shall administratively deny the application. If the applicant seeks to have the application considered further, he may then apply for a hearing before the Board. The Board shall then consider approval of the application only when there is no doubt as to the ownership of the oil and gas rights of the applicant. If a cloud or a question as to the title is determined to exist by the Board, then the Board shall deny the application, and refer the applicant to the court for a ruling on the question of ownership.

(b) If a well or wells revert back to a landowner, whether by court action, or by lease expiration or other provisions, and the well will remain in operation, then the landowner shall submit an Application to Change Operators (Form CN-0237), file an Organization Report (Form CN-0219), post a well plugging bond, post a reclamation bond if required, pay a fee of $100, and otherwise comply with well spacing rules. If the well will be used for domestic gas only, then a plugging bond in the amount of $1,500 shall be required. For domestic gas use wells deeper than 2,500 feet, the plugging bond shall increase at a rate of $1.00 for every foot deeper than 2,500 feet. No reclamation bond shall be required for a well or wells that revert back to a landowner and will be used for domestic gas only.

(c) Before a well can be turned over to a landowner for use as a fresh water well, the operator shall set a 100 foot plug within 300 feet of the surface, or a cement plug at 50 feet above the casing shoe, whichever is the deeper, and the well shall be completed as a water well, and approved by the Department's Division of Water Resources. No Organization Report (Form CN-0219) is required, and in lieu of a plugging bond the landowner shall submit a notarized letter agreeing to assume liability for any subsequent plugging which might be required.

(3) If drilling operations cease for a period of 30 days, the operator shall notify the Supervisor in writing of the reason for the shutdown and the date on which operations shall be resumed.

(4) All wells shall be either properly plugged or completed within a period of 6 months following cessation of drilling. Upon written request to the Supervisor by the operator, showing valid cause for requiring additional time, a reasonable extension of as much as 90 days additional may be granted.

(5) An applicant who requests a permit to drill on site which is closer than normal statewide spacing to the boundary of an offsetting oil and gas lease, or mineral or surface property, or on a tract of land which is contested as to the ownership of oil and gas rights, shall comply with the following procedures:

(a) Notify by certified mail all affected offset and/or separate owners of oil and gas leases and mineral and surface property, as can reasonably be determined, that he is applying for a permit to drill a well; and submit a copy of the drill-site location plat with the notice.

(b) Publish the operator's name, lease name, well number and description of the drill-site location in a newspaper of general circulation in the county where the well is to be drilled, with a statement that if any interested owner objects to the drilling of said well, they should make their objections known to the Supervisor.

(c) If, within 10 days after the notice, there are no objections to issuing the permit, then the Supervisor shall issue the permit, provided all other requirements have been complied with.

(d) If there is an objection or objections to issuing the permit, the objector or objectors shall furnish the applicant and the Supervisor the basis of the objection and support his contentions with documents, etc., within 10 days after the date of the notice.

(e) If the applicant, after receiving an objection, still wants the permit he shall then apply for a hearing before the Board. The Board shall then decide whether or not to issue the permit or refer the applicant to the court for relief.

(6) If more than one applicant applies for a permit to drill the same or a conflicting location on a tract of land at a permissible distance from an offset or offsetting well, the first application received in the Supervisor's office shall be issued the permit, provided the applicant complies with all other rules and regulations governing permits to drill a well. If the first applicant fails to exercise his permit privilege, then the next applicant of record, based on time submittal, shall receive the permit, provided he complies with all other requirements.

(7) If the ownership of the drill site tract of land is contested, all claimants shall be identified by an accompanying letter.

(8) Requests for permits for a voluntary pooled drilling unit, or for two or more leases or tracts that have been pooled for exploration or development shall be accompanied by a notarized affidavit signed by the operator that has the right to pool these leases to form a drilling unit.

(9) The Supervisor has the right to withhold the issuance of a permit to any operator in violation of any rule or regulation of this order until such violation has been removed.

Notes

Tenn. Comp. R. & Regs. 0400-52-02-.02

Original, rule filed March 20, 2013; effective June 18, 2013. Amendments filed September 16, 2019; effective 12/15/2019.

Authority: T.C.A §§ 4-5-201, et seq. and 60-1-201, et seq.