| (6) The date of attachment of the voluntary subdivision
rule for a reservoir that has been developed through expansion of
separately recognized fields into a recognized single reservoir and
is merged by commission order is the earliest discovery date of production
from such merged reservoir, and that date will be used subsequent
to the date of merger of the fields into a single field.
(7) The date of attachment of the voluntary subdivision
rule for a reservoir under any special circumstance which the commission
deems sufficient to provide for an exception may be established other
than as prescribed in this section, so that innocent parties may have
their rights protected.
(h) Exceptions to Rule 37.
(1) An order granting exception to Rule 37 wherein
protest is had shall carry as its last paragraph the following language:
It is further ordered by the commission that this order shall not
be final until 20 days after it is actually mailed to the parties
by the commission; provided that if a motion for rehearing of the
application is filed by any party at interest within such 20-day period,
this order shall not become final until such motion is overruled,
or if such motion is granted, this order shall be subject to further
action by the commission. Permits issued pursuant to paragraph (2)
of this subsection shall be issued without the 20-day waiting period.
(2) The director of the Oil and Gas Division or a delegate
of the director may issue an exception permit for drilling, deepening,
or additional completion, recompletion, or reentry in an existing
well bore if:
(A) a notice of at least 10 days has been given, and
no protest has been made to the application; or
(B) written waivers of objection are received from
all persons to whom notice would be given pursuant to subsection (a)(2)
of this section.
(3) Applications filed for drilling, deepening, or
additional completion, recompletion, or reentry will be processed
and permit issued in accordance with this regulation, subject to the
commission's discretion to set any application for hearing. If the
director or a delegate of the director declines to grant an application,
the operator may request a hearing.
(i) Rule 37 permits.
(1) Unless otherwise specified in a permit or in a
final order granting an exception to this section, permits issued
by the commission for completions requiring an exception to this section
shall expire two years from the effective date of the permit unless
drilling operations are commenced in good faith within the two-year
permit period. The permit period will not be extended.
(2) So long as a Rule 37 exception is in litigation,
the two-year permit period will not commence. On final adjudication
and decree from the last court of appeal the two-year permit period
will commence, beginning on the date of final decree.
(j) Once an application for a spacing exception has
been denied, no new application shall be entertained except on changed
conditions. Changed conditions in the commission's administration
of its Spacing Rule 37 and amendments thereto applicable to the various
special fields and reservoirs of Texas and in passing upon applications
for permits under said rule and amendments shall include, among other
things, the following.
(1) Any material changes in the physical conditions
of the producing reservoir under the tract under consideration or
under the area surrounding said tract which would materially affect
the recovery of oil, gas, or geothermal resource from the given tract.
(2) Any material changes in the distribution or allocation
of allowable production in the area surrounding the tract under consideration
which would materially affect or tend to affect the recovery of oil,
gas, or geothermal resource from the given tract.
(3) Any additional permits granted by the commission
for wells drilled in the area surrounding or on offset tracts to the
tract under consideration which would materially affect or tend to
affect the recovery of oil, gas, or geothermal resource from the given
tract.
(4) Any additional facts or evidence thereof materially
affecting or tending to affect the recovery of oil, gas, or geothermal
resource from the applicant's tract, or the property rights of applicant,
which were not known of and considered by the commission at any previous
hearing or application thereon.
(k) Exceptions to Statewide Rule 37 apply to the total
depth for which the permit is granted or if special field rules are
applicable, an exception to the spacing rule shall be granted only
for the reservoir or reservoirs or applicable depth to which the well
is projected. Subsequent recompletion of the well to reservoirs other
than that covered by the permit issued would be granted only after
the filing and processing of a new application.
(l) Salt dome oil or gas fields.
(1) The provisions of this section shall not apply
to certain approved salt dome oil or gas fields. An application for
classification as a salt dome oil or gas field shall include the following:
(A) geological evidence proving that an oil or gas
field is a piercement-type salt dome, that faulting has caused the
producing formation to be at a 45 angle or greater, and that each
well is likely to be completed in a separate reservoir;
(B) establishment, by plat or otherwise, of the probable
productive limits of the salt dome area;
(C) certification that notice of the application for
salt dome classification with evidence included has been given to
all operators in the field or, if a new field, in accordance with
subsection (a)(2) of this section; and
(D) a list of persons notified and the date notice
was mailed.
(2) The director of the Oil and Gas Division, or the
director's delegate, may administratively grant an application for
salt dome classification if the evidence proves that the oil or gas
field is a salt dome.
(3) The operator may request a hearing if the director
of the Oil and Gas Division, or the director's delegate, declines
to approve an application. If an application is protested within 10
days of notice, it will be set for hearing. After hearing, the examiner
shall recommend final commission action.
(4) The amendment providing for administrative approval
of salt dome oil and gas fields does not alter the status of those
fields previously approved and listed in this section.
(m) Wells that were deviated, whether intentionally
or otherwise, prior to April 1, 1949, and are bottomed on the lease
where permitted, are legal wells. The Rule 37 department will develop
the record in each reapplication for such deviated wells so that the
commission can determine the condition of each such well. The following
will be adduced from sworn testimony and authenticated data at each
such hearing.
(1) That such well was deviated before April 1, 1949.
Proof of completion of the well prior to that date and its subsequent
producing status is not adequate proof of deviation.
(2) That such well was completed on the lease where
the surface location was permitted. Such bottom hole location must
be proven by the submission of an acceptable authenticated directional
survey.
(3) That such bottom hole location is one that either
is not in direct violation of a condition or limitation placed in
the permit to drill, or is not in violation of a specific commission
order. Example: Denial order for a Rule 37 application for a comparable
location.
(4) That the present operator of such well or its predecessor
has not filed either a false inclination or a false directional survey
with the commission.
(5) A well that is either bottomed off the lease, deviated
after April 1, 1949, drilled in direct violation of a specific condition
or limitation placed in the Rule 37 permit, or is in violation of
a specific commission order, is an illegal well and it shall not be
permitted, and such well where permit is refused shall not be considered
a replaceable well under commission replacement-well regulation.
(6) The provisions of this section do not preclude
an operator from applying for approval of the bottom hole location
of a deviated well as a reasonable location under the rules and regulations
now applicable, provided, that such bottom hole location shall not
be approved unless the applicant proves that a vertical projection
of the permitted surface location for such well is within the productive
limits of the reservoir.
|
| Source Note: The provisions of this §3.37 adopted to be effective January 1, 1976; amended to be effective November 4, 1981, 6 TexReg 3911; amended to be effective May 7, 1982, 7 TexReg 1624; amended to be effective June 1, 1989, 14 TexReg 1586; amended to be effective May 23, 1990, 15 TexReg 2634; amended to be effective September 15, 1997, 22 TexReg 8973; amended to be effective July 10, 2000, 25 TexReg 6487; amended to be effective June 11, 2001, 26 TexReg 4088; amended to be effective September 1, 2004, 29 TexReg 8271; amended to be effective March 18, 2019, 44 TexReg 1437 |
