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SPACING
Vertical
Horizontal
Eric R. King
Oil and Gas Practice
OU Law School
September 19, 2013
Oklahoma Crude
Conservation
• 52 O.S. 87.1
• Common Source of Supply of Oil
• Well Spacing and Drilling Units
Spacing• Actual Notice at least 15 days prior to Hearing to
all parties who have the right to share in production
• File Application
• Notice via regular mail at least 15 days before Hearing
• Publication Notice – At least 15 days prior in County where Land is situated and Oklahoma County before the Hearing
• Hearing
• Issues
OAC 5-7-6
Drilling and spacing unit establishment or
modification
OAC 5-7-6.1
Horizontal well unitization for shale reservoirs
OAC 5-7-6.2
Multiunit horizontal wells in shale reservoirs
General Well Spacing
Requirements
OAC 165:10-1-21
Drilling and Spacing Units
OAC 165: 10-1-22
Permitted Well Locations
Within Standard Drilling
and Spacing Units
OAC 165: 10-1-24
Drilling and Spacing Units
• A Township - 36 Sections of Land
• Size of Drilling and Spacing Units
– 640 acres (Section)
– 320 acres – stand-up or laydown units
– 160 acres (Quarter Section)
– 80 acres – stand-up or laydown units
– 40 acres (Quarter Quarter Section)
– 20 acres Stand-Up or Lay-Down Units
– 10 acres (Quarter Quarter Quarter Section)
A Township - 36 Sections of Land
36 31 32 33 34 35 36 31
1 6 5 4 3 2 1 6
12 7 8 9 10 11 12 7
13 18 17 16 15 14 13 18
24 19 20 21 22 23 24 19
25 30 29 28 27 26 25 30
36 31 32 33 34 35 36 31
1 6 5 4 3 2 1 6
640 acres (Section)
320 acres (Half Section)
160 acres (Quarter Section)
Proper Well Location Requirements
• 640 acres - No closer than 1320 feet from unit boundaries
• 320 acres - Stand-Up or Lay-Down Units – No closer than 660 feet from proper Quarter Section i.e. on NW-SE proper location within each 320 acre unit (or can be NE-SW)
• 160 acres –No closer than 660 from unit boundaries
• 80 acres – Stand-Up or Lay-Down Units – No closer than 330 feet from proper Quarter QuarterSection i.e. on NW-SE proper location within each 80 acre unit (or can be NE-SW)
Proper Well Location Requirements
(continued)
• 40 acres - No closer than 330 feet from unit
boundary
• 20 acres Stand-Up or Lay-Down Units - No closer
than 165 feet from proper Quarter Quarter Section
i.e. on NW-SE proper location within each 20 acre
unit (or can be NE-SW)
• 10 acres – No closer than 165 feet from unit
boundary
Vertical
Drilling and Spacing Causes
Samples applications/notices/orders
• 40-acre units
• 80 acre stand-up units
• 160-acre units
• 320-acre lay-down Units
• 640-acre units
Horizontal Drilling Offshore
Horizontal Drilling Texas
Horizontal Drilling compared to
Slant Hole Drilling
Horizontal Drilling
OAC 165: 10-3-28
(b) Definitions
(c) General horizontal drilling
requirements
(d) Horizontal well requirements in an
unspaced common source of supply.
(e) Drilling and spacing units
(f) Horizontal well location
requirements for horizontal well units
and horizontal well unitizations
(1) Conventional reservoirs. In a conventional reservoir, the
completion interval of a horizontal well in a horizontal well unit
shall be located not less than the minimum distance from the
unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80- or
160-acre horizontal well unit.
(C) Not less than 660 feet from the boundary of any 320- or
640-acre horizontal well unit.
(2) Unconventional reservoirs. In an unconventional reservoir,
the completion interval of a horizontal well in a horizontal well
unit shall be located not less than the minimum distance from
the unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80-, 160-,
320-, or 640-acre horizontal well unit.
(3) Horizontal well unitizations. The completion interval of a
horizontal well in a horizontal well unitization shall not be
located less than 330 feet from the unit boundary.
(g) Alternative well location
requirements
(1) Horizontal oil well allowables may be established
administratively using the standard allowables provided in
Appendix A (Allocated Well Allowable Table) supplemented by
the additional allowables provided in Appendix C (Table HD) to
this Chapter.
(2) The allowable for a horizontal gas well shall be computed in
the manner prescribed for a non-horizontal gas well in the same
common source of supply.
(h) Allowable
(3) The allowable for a horizontal well unit or horizontal well
unitization with multiple horizontal gas wells shall be the sum of
allowables for the separate horizontal gas wells. From this
summation, the allowable for each horizontal gas well will be
calculated as if it were the only well in the unit.
(4) The allowable for a multi-unit horizontal well shall be
allocated to each affected unit using the allocation factors
determine in accordance with 52 O.S. § 87.8(B)(1).
Horizontal well units, horizontal well unitizations and multi-unit
horizontal wells may be pooled as provided in 52 O.S. § 87.1, 52
O.S. § 87.6 et seq. and Commission Rules of Practice, OAC 165:5.
Pooling
OAC 165: 10-29-2
Alternative location requirements for horizontal
well units
(a) Scope and effect. The well location requirements of this
Section apply to horizontal wells completed in horizontal well
units in designated common sources of supply and
geographic areas as specified in this Section. Horizontal wells
covered by this Section are subject to OAC 165:10-3-28 and
other applicable Commission rules except as provided in this
Section.
(b) Woodford shale.
(1) This subsection applies to horizontal wells completed in
the Woodford shale common source of supply in Atoka,
Blaine, Caddo, Canadian, Coal, Dewey, Grady, Haskell,
Hughes, Kingfisher, LeFlore, Latimer, McIntosh, Pittsburg,
and Sequoyah Counties.
(2) The completion interval of a horizontal well subject to this
subsection shall be located not less than the minimum
distance from the boundary of a standard or non-standard
horizontal well unit as follows:
(A) Not less than 330 feet from an east or west unit
boundary.
(B) Not less than 165 feet from a north or south unit
boundary.
Appendix C: Table HD
Recommended Additional Allowable for Horizontal Oil Wells
based on True Vertical Depth and Completion Interval
Average True Vertical
Depth of Pool in Feet
Additional Allowable
in Barrels per foot of
Completion Interval
To 4,000 .2
4,001 to 8,000 .3
8,001 to 12,000 .4
Greater than 12,000 .5
All oil produced and marketed during the drilling and completion
operations shall be charged against the allowable assigned to the
well upon completion.
Effective date of the allowable shall be the date of first
production.
Horizontal
Drilling and Spacing Causes
Sample application/notice/final order
Sample Survey
Horizontal Spacing
(OCC Rules and Regulations)
OAC: 165:5-7-6(g)
OAC: 165:5-7-6(h)
OAC: 165:5-7-6(i)
OAC: 165:5-7-6.1
OAC: 165:5-7-6.2
OAC: 165:10-1-21
OAC:165:10-1-24
OAC:165:10-1-25
OAC:165:10-3-4(f)
OAC:165:10-3-27(c)(1)
OAC:165:10-3-28
Appendix C (Table HD)
(Case Law)
Samson Resources Company v. Corporation
Commission, 831 P.2d 663, 665 (Okla. App 1992)
Horizontal Pooling
(OCC Rules and Regulations)
OAC:165:5-15-3(g)
OAC:165:5-13-3(h)
Deviation from the Vertical(OCC Rules and Regulations)
OAC:165:10-3-27
Horizontal Allowables
(OCC Rules and Regulations)
OAC:165:10-3-28(C)(2)
OAC:165:10-3-28(f)(1)
OAC:165:10-3-28(f)(2)
OAC:165:10-3-28(h)(2)
OAC:10-3-29(j)(1)
Horizontal Gross Production Tax
(OCC Rules and Regulations)
OAC:165:10-21-65
OAC:165:10-21-66
OAC:165:10-21-67
OAC:165:10-21-68
Eric R. King
One Leadership Square, 15th Floor
211 N. Robinson Ave.
Oklahoma City, OK 73102
(405) 235-5518
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