New Mexico Register /
Volume XXIX, Issue 12 / June 26, 2018
This
is an amendment to 19.15.15 NMAC, Sections 1, 3, 11, 12, 13, 15 and 16,
effective 6/26/2018.
19.15.15.1 ISSUING AGENCY: [Energy, Minerals and Natural
Resources Department, Oil Conservation Division] Oil Conservation
Commission.
[19.15.15.1 NMAC - N, 12/1/2008; A, 6/26/2018]
19.15.15.3 STATUTORY AUTHORITY: 19.15.15 NMAC is adopted
pursuant to the Oil and Gas Act, [NMSA 1978,] Section 70-2-6, Section
70-2-11 and Section 70-2-12 NMSA 1978, which authorizes the division to
establish well spacing.
[19.15.15.3 NMAC - N, 12/1/2008; A, 6/26/2018]
19.15.15.11 Acreage Assignment:
A. Well tests and classification. The operator of a wildcat or development gas
well to which more than 40 acres has been dedicated shall conduct a potential
test within 30 days following the well’s completion and file the test with the
division within [10] 45 days following the test’s
completion. (See 19.15.19.8 NMAC.)
(1) The completion date for a gas well is the date of the conclusion of active completion work on the well.
(2) If the division determines that a well should not be classified as a gas well, the division shall reduce the acreage dedicated to the well to the standard acreage for an oil well.
(3) The operator’s failure to file the test within the specified time subjects the well to the acreage reduction.
B. Non-standard spacing units. An operator shall not produce a well that does not have the required amount of acreage dedicated to it for the pool or formation in which it is completed until the division has formed and dedicated a standard spacing unit for the well or approved a non-standard spacing unit.
(1) Division district offices may approve non-standard spacing units without notice when the unorthodox size or shape is necessitated by a variation in the legal subdivision of the United States public land surveys or consists of an entire governmental section, and the non-standard spacing unit is not less than seventy percent or more than one hundred-thirty percent of a standard spacing unit. The operator shall obtain division approval of form C-102 showing the proposed non-standard spacing unit and the acreage contained in the unit.
(2) The director may approve administratively an application for non-standard spacing units after notice and opportunity for hearing when the unorthodox size or shape is necessitated by a variation in the legal subdivision of the United States public land surveys or the following facts exist:
(a) the non-standard spacing unit consists of a single quarter-quarter section or lot or quarter-quarter sections or lots joined by a common side; and
(b) the non-standard spacing unit lies wholly within a single quarter section if the well is completed in a pool or formation for which 40, 80 or 160 acres is the standard spacing unit size; a single half section if the well is completed in a pool or formation for which 320 acres is the standard spacing unit size; or a single section if the well is completed in a pool or formation for which 640 acres is the standard spacing unit size.
(3) An
operator shall file an application for administrative approval of a
non-standard spacing [units] unit pursuant to Paragraph (2) of
Subsection B of 19.15.15.11 NMAC or Paragraph (5) of Subsection B of
19.15.16.15 NMAC, with the division’s Santa Fe office that is accompanied
by:
(a) a plat showing the spacing unit and an applicable standard spacing unit for that pool or formation, the proposed well dedications and all adjoining spacing units;
(b) a
list of affected persons [as defined in Paragraph (2) of Subsection A of
19.15.4.12 NMAC] entitled to notice of the application; and
(c) a statement discussing the reasons for the formation of the non-standard spacing unit.
(4) The applicant shall submit a statement attesting that the applicant, on or before the date the applicant submitted the application to the division, notified the affected persons identified on the list described in Paragraph (3) of Subsection B of 19.15.15.11 NMAC by sending a copy of the application, including a copy of the plat described in Paragraph (3) of Subsection B of 19.15.15.11 NMAC, by certified mail, return receipt requested, advising them that if they have an objection they must file the objection in writing with the division within 20 days from the date the division receives the application. The director may approve the application without hearing upon receipt of waivers from all the notified persons or if no person has filed an objection within the 20-day period.
(5) The director may set for hearing an application for administrative approval.
C. Exceptions to number of wells per spacing
unit. The director may permit
exceptions to 19.15.15 NMAC or special pool orders concerning the number of
wells allowed per spacing unit only after notice and opportunity for
hearing. An applicant for an exception
shall notify all affected persons [defined in Paragraph (2) of Subsection A
of 19.15.4.12 NMAC] in adjoining spacing units in the same pool or in
adjoining tracts not included in such spacing units.
[19.15.15.11 NMAC - Rp, 19.15.3.104 NMAC, 12/1/2008; A, 6/26/2018]
19.15.15.12 Special rules for multiple operators within a spacing unit:
A. Allowable production. If an operator completes a well in an oil pool or prorated gas pool, located within a proration unit containing an existing well or wells producing from that pool and operated by a different operator, unless all operators of wells producing from that proration unit agree, the allowable production from the newly completed well shall not exceed the difference between the allowable production for the proration unit and the actual production from the pool of the existing well or wells within the proration unit. The division may authorize exceptions to Subsection A of 19.15.15.12 NMAC after hearing following appropriate notice.
B. Notice requirements.
(1) An operator who intends to operate a well in a spacing or proration unit containing an existing well or wells operated by another operator shall, prior to filing the application for permit to drill, deepen or plug back for the well, furnish written notification of its intent to the operator of each existing well, and, if the unit includes state, federal or tribal minerals, to the state land office or BLM, as applicable; provided that separate notification to the BLM is not required if the operator will file the application with the BLM pursuant to 19.15.7.11 NMAC.
(2) The operator shall send the notices by certified mail, return receipt requested, and shall specify the proposed well’s location and depth.
(3) The applicant shall submit with its application for permit to drill, deepen or plug back either
(a) a statement attesting that, at least 20 days before the date that the application was submitted to the division, the applicant sent notices to the designated parties, by certified mail, return receipt requested, advising them that if they have an objection they must deliver a written statement of objection to the proposing operator within 20 days of the date the operator mailed the notice, and that it has received no such objection; or
(b) written waivers from all persons required to be notified (the BLM’s approval of the application being deemed equivalent to waiver by that agency); in event of objection, the division may approve the application only after hearing.
C. Transfer of wells. If an operator transfers operation of less
than all [of] its wells located within a spacing or proration unit to another
operator, and the spacing unit includes state, federal or tribal minerals, the
operator shall, prior to filing form C-145 to effectuate the transfer, notify
in writing the state land office or BLM, as applicable, of the transfer.
D. Compulsory pooled units. No provision of 19.15.15 NMAC authorizes the operation of a producing well within a unit described in an existing compulsory pooling order by an operator other than the operator designated in the order.
E. Federal or state exploratory units. No provision of 19.15.15 NMAC authorizes a producing well’s operation within a federal exploratory unit or state exploratory unit by an operator other than the unit’s designated operator except as provided by BLM regulations or state land office rules applicable to the unit.
[19.15.15.12 NMAC - Rp, 19.15.3.104 NMAC, 12/1/2008; A, 6/26/2018]
19.15.15.13 Unorthodox Locations:
A. Well locations within a secondary recovery, tertiary recovery or pressure maintenance project for producing wells or injection wells that are unorthodox based on 19.15.15.9 NMAC’s requirements and are necessary for an efficient production and injection pattern are authorized, provided that the unorthodox location within the project is no closer than the required minimum distance to the outer boundary of the lease or unitized area, and no closer than 10 feet to a quarter-quarter section line or subdivision inner boundary. These locations only require such prior approvals as are necessary for an orthodox location.
B. The
director may grant an exception to the well location requirements of 19.15.15.9
NMAC, [and] 19.15.15.10 NMAC and 19.15.16.15 NMAC or
special pool orders after notice and opportunity for hearing when the exception
is necessary to prevent waste or protect correlative rights.
C. The
operator shall submit applications for administrative approval pursuant to
Subsection B of 19.15.15.13 NMAC to the division’s Santa Fe office accompanied
by a plat showing the spacing unit, the proposed unorthodox well location and
the adjoining spacing units and wells; a list of affected persons [as
defined in Paragraph (2) of Subsection A of 19.15.4.12 NMAC] entitled to
notice pursuant to Paragraph (2) of Subsection A of 19.15.4.12 NMAC; and
information evidencing the need for the exception. The division shall give notice as required in
19.15.4.9 NMAC and the operator shall give notice as required by Paragraph (2)
of Subsection A of 19.15.4.12 NMAC.
D. The applicant shall submit a statement attesting that the applicant, on or before the date that the applicant submitted the application to the division, sent notification to the affected persons by furnishing a copy of the application, including a copy of the plat described in Subsection C of 19.15.15.13 NMAC, by certified mail, return receipt requested, advising them that if they have an objection they shall file it in writing with the division within 20 days from the date the division receives the application. The director may approve the unorthodox location upon receipt of waivers from all the affected persons or if no affected person has filed an objection within the 20-day period.
E. The director may set for hearing an application for administrative approval of an unorthodox location.
F. Whenever the division approves an unorthodox location, it may order any action necessary to offset an advantage of the unorthodox location.
[19.15.15.13 NMAC - Rp, 19.15.3.104 NMAC, 12/1/2008; A, 6/26/2018]
19.15.15.15 Division-Initiated
Exceptions:
[In order to] To prevent waste, the division may, after
hearing, set different spacing requirements and require different acreage for
drilling tracts in a defined oil or gas pool.
[19.15.15.15 NMAC - Rp, 19.15.3.104 NMAC, 12/1/2008; A, 6/26/2018]
19.15.15.16 Pooling Or Communitization Of Small Oil Lots:
A. The division may approve the pooling or communitization of fractional oil lots of 20.49 acres or less with a contiguous oil spacing unit when the ownership is common and the tracts are part of the same lease with the same royalty interests if the following requirements are satisfied:
(1) the
operator [submits an application for administrative approval] applies
to the division’s Santa Fe office for administrative approval with an
application accompanied by:
(a) a plat showing the dimensions and acreage involved, the acreage’s ownership, the location of existing and proposed wells and adjoining spacing units;
(b) a
list of affected persons [as defined in Paragraph (2) of Subsection A of
19.15.4.12 NMAC] in the oil lots and the contiguous spacing unit to be
pooled or communitized; and
(c) a statement discussing the reasons for the pooling or communitization; and
(2) the applicant submits a statement attesting that the applicant, on or before the date the applicant submitted the application to the division, sent notification to the affected persons by submitting a copy of the application, including a copy of the plat described in Paragraph (1) of Subsection A of 19.15.15.16 NMAC, by certified mail, return receipt requested, advising them that if they have an objection they must file it in writing with the division within 20 days from the date the division receives the application.
B. The director may approve the application upon receipt of waivers from all the notified persons or if no person has filed an objection within the 20-day period.
C. The director may set for hearing an application for administrative approval.
D. The division may consider the common ownership and common lease requirements met if the applicant furnishes with the application a copy of an executed pooling agreement communitizing the tracts involved.
[19.15.15.16 NMAC - Rp, 19.15.3.104 NMAC, 12/1/2008; A, 6/26/2018]