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RULE §3.38Well Densities

    (C) on leases, pooled units, or unitized tracts from which production is secured from more than one field, outlines the acreage assigned to the wells in each field that is the subject of the current application;

    (D) corresponds to the listing required under subsection (g)(1)(A) of this section.

    (E) is certified by a person acquainted with the facts pertinent to the application that the plat is accurately drawn to scale and correctly reflects all pertinent and required data.

  (3) Substandard acreage. An application for a permit to drill on a lease, pooled unit, or unitized tract composed of substandard acreage must include a certification in a prescribed form indicating the date the lease, or the drillsite tract of a pooled unit or unitized tract, took its present size and shape.

  (4) Surplus acreage. An application for permit to drill on surplus acreage pursuant to subsection (c) of this section must include a certification in a prescribed form indicating the date the lease, pooled unit, or unitized tract took its present size and shape.

  (5) Certifications. Certifications required under paragraphs (3) and (4) of this subsection shall be filed on Form W-1A, Substandard Acreage Certification.

    (A) The operator shall file the Form W-1A with the drilling permit application and shall indicate the purpose of filing. The operator shall accurately complete all information required on the form in accordance with instructions on the form.

    (B) The operator shall list the field or fields for which the substandard acreage certification applies in the designated area on the form. If there are more than three fields for which the certification applies, the operator shall attach additional Forms W-1A and shall number the additional pages in sequence.

    (C) The operator shall file the original Form W-1A with the Commission's Austin office and a copy with the appropriate district office, unless the operator files electronically.

    (D) The operator or the operator's agent shall certify the information provided on the Form W-1A is true, complete, and correct by signing and dating the form, and listing the requested identification and contact information.

    (E) Failure to timely file the required information on the appropriate form may result in the dismissal of the application.

(h) Procedure for obtaining exceptions to the density provisions.

  (1) Filing requirements. If a permit to drill requires an exception to the applicable density provision, the operator must file, in addition to the items required by subsection (g) of this section:

    (A) a list of the names and addresses of all affected persons. For the purpose of giving notice of application, the Commission presumes that affected persons include the operators and unleased mineral interest owners of all adjacent offset tracts, and the operators and unleased mineral interest owners of all tracts nearer to the proposed well than the prescribed minimum lease-line spacing distance. The Commission designee may determine that such a person is not affected only upon written request and a showing by the applicant that:

      (i) competent, convincing geological or engineering data indicate that drainage of hydrocarbons from the particular tracts subject to the request will not occur due to production from the proposed well; and

      (ii) notice to the particular operators and unleased mineral interest owners would be unduly burdensome or expensive;

    (B) engineering and/or geological data, including a written explanation of each exhibit, showing that the drilling of a well on substandard acreage is necessary to prevent waste or to prevent the confiscation of property;

    (C) additional data requested by the Commission designee.

  (2) Notice of application. Upon receipt of a complete application, the Commission will give notice of the application by mail to all affected persons for whom signed waivers have not been submitted. If, after diligent efforts, the applicant is unable to ascertain the name and address of one or more persons required by this subsection to be notified, then the applicant shall notify such persons by publishing notice of the application in a form approved by the Commission. The applicant shall publish the notice once each week for two consecutive weeks in a newspaper of general circulation in the county where the well will be located. The first publication shall be published at least 14 days before the protest deadline in the notice of application. The applicant shall file with the Commission a publisher's affidavit or other evidence of publication.

  (3) Approval without hearing. If the Commission designee determines, based on the data submitted, that a permit requiring an exception to the applicable density provision is justified according to subsection (f) of this section, then the Commission designee may issue the exception permit administratively if:

    (A) signed waivers from all affected persons were submitted with the application; or

    (B) notice of application was given in accordance with this subsection and no protest was filed within 21 days of the notice; or

    (C) no person appeared to protest the application at a hearing scheduled pursuant to paragraph (4)(A) of this subsection.

  (4) Hearing on the application.

    (A) If a written protest is filed within 21 days after the notice of application is given in accordance with paragraph (2) of this subsection, the application will be set for hearing.

    (B) If the application is not protested and the Commission designee determines that a permit requiring an exception to the applicable density provision is not justified according to subsection (f) of this section, the operator may request a hearing to consider the application.

(i) Duration. A permit is issued as an exception to the applicable density provision shall expire two years from the effective date of the permit; unless drilling operations are commenced in good faith within the two year period.

(j) The requirements for density exceptions for wells in a designated unconventional fracture treated (UFT) field are set forth in §3.86(k) of this title (relating to Horizontal Drainhole Wells).

Source Note: The provisions of this §3.38 adopted to be effective November 1, 1989, 14 TexReg 5255; amended to be effective April 21, 1997, 22 TexReg 3404; amended to be effective July 10, 2000, 25 TexReg 6487; amended to be effective June 11, 2001, 26 TexReg 4088; amended to be effective February 13, 2002, 27 TexReg 906; amended to be effective September 1, 2004, 29 TexReg 8271; amended to be effective February 1, 2016, 41 TexReg 785; amended to be effective March 18, 2019, 44 TexReg 1437

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