|(a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Correlative interval--The depth interval designated
by the field rules or by new field designation on Form P-7 (New Field
(2) First take point--The take point in a horizontal
drainhole well nearest to the point where the drainhole penetrates
the top of the correlative interval. The first take point may be at
a location different from the penetration point.
(3) Horizontal drainhole--That portion of the wellbore
drilled in the correlative interval, between the penetration point
and the terminus.
(4) Horizontal drainhole displacement--The calculated
horizontal displacement of the horizontal drainhole from the first
take point to the last take point.
(5) Horizontal drainhole well--Any well that is developed
with one or more horizontal drainholes having a horizontal drainhole
displacement of at least 100 feet.
(6) Last take point--The take point in a horizontal
drainhole well nearest the terminus. The last take point may be at
a location different from the terminus.
(7) Nonperforation zone (NPZ)--A portion of a horizontal
drainhole well within the field between the first take point and the
last take point that the operator has intentionally designated as
containing no take points pursuant to the spacing requirements in §3.37
of this title (relating to Statewide Spacing Rule).
(8) Penetration point--The point where the drainhole
penetrates the top of the correlative interval.
(9) Record well--The single horizontal drainhole within
a stacked lateral well designated by the operator as the record well
for reporting purposes.
(10) Stacked lateral well--A horizontal drainhole well
in which the following conditions are met:
(A) there are two or more horizontal drainhole wells
on the same lease, pooled unit, or unitized tract at different depths
within the correlative interval for the field;
(B) the horizontal drainholes are drilled from different
(C) all take points of a stacked lateral well's horizontal
drainholes are within a rectangular area the width of which is 660
feet, and the length of which is 1.2 times the distance between the
first and last take points of the record well;
(D) all horizontal drainholes are tested independently
and have the same classification (i.e., gas or oil). Only horizontal
drainholes of the same classification are eligible to be designated
as a stacked lateral well; and
(E) there is only one operator for the stacked lateral
(11) Take point in a horizontal drainhole well--Any
point along a horizontal drainhole where oil and/or gas can be produced
from the correlative interval.
(12) Terminus--The farthest point required to be surveyed
along the horizontal drainhole from the penetration point and within
the correlative interval.
(13) Unconventional fracture treated (UFT) field--A
field designated by the Commission under subsection (i) of this section
for which horizontal well development and hydraulic fracture treatment
(as defined in §3.29(a)(15) and (16) of this title (relating
to Hydraulic Fracturing Chemical Disclosure Requirements)) must be
used in order to recover resources from all or a part of the field
and which may include the drilling of vertical wells along with the
drilling of horizontal wells.
(b) Drainhole spacing.
(1) No take point on a horizontal drainhole shall be
located nearer than 1,200 feet (horizontal displacement), or other
between-well spacing requirement under applicable rules for the field,
to any take point along any other horizontal drainhole in another
well, or to any other well completed or permitted in the same field
on the same lease, pooled unit, or unitized tract.
(2) No take point on a horizontal drainhole shall be
located nearer than 467 feet, or other lease-line spacing requirement
under applicable rules for the field, from any property line, lease
line, or subdivision line.
(3) All wells developed with horizontal drainholes
shall otherwise comply with §3.37 of this title (relating to
Statewide Spacing Rule), or other applicable spacing rules.
(4) If the drilling permit application indicates that
there will be one or more NPZs, then the as-drilled plat filed after
completion of the well shall be certified by a person with knowledge
of the facts pertinent to the application that the plat is accurately
drawn to scale and correctly reflects all pertinent and required data.
In addition to the information required under subsection (f) of this
section, the certified as-drilled plat shall include:
(A) the as-drilled track of the wellbore;
(B) the location of each take point on the wellbore;
(C) the boundaries of any wholly or partially unleased
tracts within the distance permitted under §3.37 of this title
or applicable special field rules of the wellbore; and
(D) notations of the shortest distance from each wholly
or partially unleased tract within the distance permitted under §3.37
of this title or applicable special field rules of the wellbore to
the nearest take point on the wellbore.
(5) To comply with the spacing requirements set forth
in paragraph (3) of this subsection, the take-points along the as-drilled
location of a properly permitted horizontal drainhole shall fall within
a rectangle established as follows:
(A) two sides of the rectangle are parallel to the
permitted drainhole and 50 feet or 10% of the minimum distance to
any property line, lease line or subdivision line, whichever is greater,
on either side of the drainhole; and
(B) the other two sides of the rectangle are perpendicular
to the sides described in subparagraph (A) of this paragraph, with
one of those sides passing through the permitted first take point
and the other side passing through the permitted last take point.
(6) Prior to perforating the wellbore within an approved
NPZ, the operator must amend the permit to authorize perforations
within the originally-approved NPZ.
(c) Well densities. All wells developed with horizontal
drainholes shall comply with §3.38 of this title (relating to
Well Densities) or other applicable density rules.
(d) Proration and drilling units.
(1) Acreage may be assigned to each horizontal drainhole
well for the purpose of allocating allowable oil or gas production
up to the amount specified by applicable rules for a proration unit
for a vertical well plus the additional acreage assignment as provided
in this paragraph.
(2) Assignment of acreage to proration and drilling
units for horizontal drainhole wells shall comply with §3.40
of this title (relating to Assignment of Acreage to Pooled Development
and Proration Units).
(3) All proration and drilling units shall consist
of continuous and contiguous acreage and proration units shall consist
of acreage that can be reasonably considered to be productive of oil
(4) The maximum daily allowable assigned to a horizontal
well shall comply with the table in subsection (d)(1) of this section
and the maximum daily allowable specified by paragraph (5) of this
subsection, unless special field rules specify different requirements
for acreage or maximum daily allowable.
(5) The maximum daily allowable for a horizontal drainhole
well in a designated UFT field shall be 100 barrels of oil for each
acre that is assigned to an oil well for allowable purposes, or 600
Mcf of gas for each acre that is assigned to a gas well for allowable
purposes. This paragraph does not affect suspension of the allocation
formula under §3.31(j) of this title (relating to Gas Reservoirs
and Gas Well Allowable). The maximum daily allowable for a horizontal
drainhole well in a field that has not been designated as a UFT field
shall be determined by multiplying the applicable allowable for a
vertical well in the field with a proration unit containing the maximum
acreage authorized by the applicable rules for the field, exclusive
of tolerance acreage, by a fraction:
(A) the numerator of which is the acreage assigned
to the horizontal drainhole well for proration purposes; and
(B) the denominator of which is the maximum acreage
authorized by the applicable field rules for proration purposes, exclusive
of tolerance acreage. The daily oil allowable shall be adjusted in
accordance with §3.49(a) of this title (relating to Gas-Oil Ratio),
(6) All points on the horizontal drainhole from the
first take point to the terminus shall be within the proration and
drilling unit. If the penetration point is located on an offsite tract,
the conditions prescribed in subsection (g) of this section shall
be met before the drilling permit application is submitted to the
(e) Multiple drainholes allowed.
(1) A single well may be developed with more than one
horizontal drainhole originating from a single vertical wellbore.
(2) A horizontal drainhole well developed with more
than one horizontal drainhole shall be treated as a single well.
(3) The horizontal drainhole displacement used for
calculating additional acreage assignment for a well completed with
multiple horizontal drainholes shall be the horizontal drainhole displacement
of the longest horizontal drainhole plus the projection of any other
horizontal drainhole on a line that extends in a 180 degree direction
from the longest horizontal drainhole.
(f) Stacked lateral wells.
(1) For oil and gas wells, stacked lateral wells within
the correlative interval for the field may be considered a single
well for density and allowable purposes, at an operator's discretion.
If an operator chooses to designate horizontal drainholes as a stacked
lateral well, the operator shall designate:
(A) one horizontal drainhole within the stacked lateral
well as the record well. An operator may change the record well designation
to another wellbore by filing amended drilling permit applications
and completion reports for the previous and the new record well; and
(B) all points, from the first take point to the last
take point, of the record well for a stacked lateral well are within
the proration and drilling unit designated for that well. Notwithstanding
paragraph (4) of this subsection, all points from the first take point
to the last take point of any other horizontal drainhole comprising
the stacked lateral well are not required to be within the proration
and drilling unit designated for the record well so long as they otherwise
comply with the requirements of this section and any applicable lease
line spacing rules.
(2) For the purpose of assigning additional acreage
to the stacked lateral well, the horizontal drainhole displacement
shall be calculated based on the distance from the first take point
to the last take point in the horizontal drainhole for the record
well, regardless of the horizontal drainhole displacement of other
horizontal drainholes of the stacked lateral well.
(3) Each surface location of a stacked lateral well
shall be permitted separately and assigned an API number. When applying
for a drilling permit for a stacked lateral well, the operator shall:
(A) identify each surface location of such well as
a stacked lateral well on the Form W-1 drilling permit application;
(B) identify on the plat any other existing, or applied
for, horizontal drainholes comprising the stacked lateral well being
(C) depict on the plat a rectangle described in subsection
(a)(10)(C) of this section indicating the lateral boundaries of the
stacked lateral well.
(4) Each horizontal drainhole of a stacked lateral
well shall comply with: the applicable minimum spacing distance under §3.37
of this title or any applicable special field rules for any lease,
pooled unit or property line; and the applicable minimum between well
spacing distance under §3.37 of this title or any applicable
special field rules for any different well, including all horizontal
drainholes of any other stacked lateral well, on the same lease or
pooled unit in the field. An operator may seek an exception to §3.37
or §3.38 of this title for stacked lateral wells in accordance
with the Commission's rules in this chapter or any applicable special
field rule. There are no maximum or minimum distance limitations between
horizontal drainholes of a stacked lateral well in a vertical direction.
(5) An operator shall file separate completion forms
for each surface location of the stacked lateral well. An operator
shall also file a certified plat showing the as-drilled location for
each surface location of a stacked lateral well. The certified as-drilled
(A) show each horizontal drainhole from each surface
(B) depict on the plat a rectangle described in subsection
(a)(10)(C) of this section indicating the lateral boundaries of the
stacked lateral well.