PowerPoint Presentation · •If the date the tract (lease) took its current size and shape is...

7/23/2019

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Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)

Statewide Rules 37 and 38 - Drilling

Permits

Christopher Houston and Lorenzo Garza

August 2019


Statewide Rule 37 & 38

• Overview

– Terminology

– Triggers

–Notification Parameters

–Plat Requirements

– SWR Resolutions

–No Perf Zone (NPZ) Requirements

–NOA by Publication Requirements


Terminology

SWR 37 & 38 TERMINOLOGY

–OFFSET

–WAIVER

• Basic information required

• Information on waiver must match W-1

• We will not except waivers older than 6 months

• Example on next page

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Waiver


Terminology (1 of 2)

SWR 37 & 38 Terminology

– Service List

–Unaffected

• Lease Spacing

• Between Well

• Density


Terminology (2 of 2)

SWR 37 & 38 Terminology

–NPZ

–NOA by Publication

–Due Diligence Letter

–Date of Issuance

– Term Out Date

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Take Point Definition

• Take point in a horizontal drainhole well is defined as any point along a horizontal drainholewhere oil and/or gas can be produced from the correlative interval

Knowing and understanding this simple concept will help you in determining when an exception is needed or if you are using Non-Perforation Zones to keep an exception from being triggered.


Statewide Rule 37 Triggers

What Can Trigger a SWR 37 Violation?

• Productive portion of my well is to close to an exterior lease line

• Productive portion of my well is to close to an interior tract line within my pooled unit that is not completely leased or pooled

• Productive portion of my well is to close to another well in the same field on my lease


What is not a Statewide Rule 37 Trigger

• Location of my Penetration Point, unless it is also a take point, to a lease line

• An Off-Lease Penetration Point

• An Off-Lease Surface Location

• Correct usage of a Non-Perforation Zone

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Field Rules- Statewide Rules


Field Rules- Special Rules


Field Rules- Special Horizontal Rules

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Statewide Rule 37 Lease Line

• SWR 37 Lease Line Triggers

– Vertical

– Directional

– Horizontal

– Horizontal with Special Rules


Statewide Rule 37 Lease Line- Vertical


Statewide Rule 37 Lease Line- Directional

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Statewide Rule 37 Lease Line- Horizontal


Special Horizontal Field Rules


Special Horizontal Field Rules- FTP & LTP

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Special Horizontal Field Rules- Perpendicular


Special Horizontal Field Rules- Dual Compliance


Special Horizontal Field Rules-Special

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Statewide Rule 37 Notification- Lease Line

SWR 37 Lease Line Notification Parameters

– Offsets within the greater of the lease line spacing or 1/2 of the between well spacing

– If no between well spacing, the notice area is the same as the lease line spacing

– Fields with special horizontal rules and between well spacing have the same notice area as a regular horizontal well


Statewide Rule 37 Notice Area- Vertical


Statewide Rule 37 Notice Area- Vertical #2

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Statewide Rule 37 Notice Area- Directional


Statewide Rule 37 Notice Area- Horizontal


Statewide Rule 37 Between Well

SWR 37 Between Well

– Producing part of the well is too close to producing portion of another well in the same LEASE and FIELD

– Wells owned by other operators can be the nearest well if in the same LEASE and FIELD

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Statewide Rule 37 - Between Well


Statewide Rule 37 Notification- Between Well

SWR 37 Between Well Notification Parameters

– Offsets within the greater of the lease line spacing or 1/2 of the between well spacing AND each adjacent tract

– It is possible to have an offset that is not adjacent but they are still within the notification area


Statewide Rule 37 Notice Area- Between Well

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Statewide Rule 38

SWR 38 Density– A SWR 38 is triggered when there are more wells

on the lease than allowed for by the field rules

• If the Field rules are 80 acre, then the 9th well on a 640 acre lease would require an exception to SWR 38

• 640/9=71.11 this is less than allowed for by the field rules

Note: In some cases the use of Stacked Lateral provisions approved for your field or under SWR 86 can negate the need for a SWR 38 exception


Statewide Rule 38- Legal


Statewide Rule 38- Exception Required

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Statewide Rule 38 Notification

SWR 38 Density Notification Parameters

– Offsets within the lease line spacing AND each adjacent tract

– It is possible to have an offset that is not adjacent but they are still within the notification area

– Refer to your field rules as there may be different approved parameters for this particular field


Statewide Rule 38 Notice Area


Statewide Rule 37 & 38- Plats

Plat Requirements – Plat must be certified with a signature or surveyors

stamp

– Plat must have offsets clearly labeled in the notification area

Note: Even if you are your choosing “own offset” as a resolution to the exception you must still clearly label your companies name in the appropriate area on the plat.

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Resolutions

SWR 37 & 38 Resolutions

– Own Offset

– Waiver

– Service List

– Notice by Publication

– Unaffected

• For SWR 37 Lease Line offsets are in another state or country

• For SWR 37 Between Well and SWR 38 offsets are in another state or country OR the offsets are greater than 1 mile from the producing portion of the well


Resolutions- Entity for Density

• SWR 37 & 38 Resolutions- cont.

– For SWR 37 Between Well an Entity for Density docket number can be used

• Some approved dockets for EFD’S may have special lease line requirements that require the operator to send out notice


Resolutions- Non-Concurrent Production

–For SWR 37 Between Well and SWR 38 a Non-Concurrent Production Restriction can be used

• Restriction stating that the applied for well and any wells on the restriction will not produce from the same field at the same time

• All wells that trigger an exception must be included in the restriction

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Resolutions- SWR 38 with no Special Provisions

• SWR 38 Resolutions

– SWR 38 Data is required unless the field allows for alternative notice parameters

• This must be selected on the Exceptions tab

– Permits requiring SWR 38 data will be reviewed by an RRC Technical Examiner before final approval


Resolutions- Choosing Special Parameters


Resolutions- Supporting Data

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Resolutions-Supporting Data Example


Resolutions- W-1A

• SWR 38 Resolutions– W-1A date

• If the date the tract (lease) took its current size and shape is prior to the field rules going into effect a permit can be granted for the first well on sub-standard acreage

• If this is the last well on the lease and you have the specified tolerance acreage available AND the tract (lease) took its current size and shape prior to the field rules going into effect then then a permit can be granted on sub-standard acreage


Resolutions- W-1A Form

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No Perf Zones

• No Perf Zone (NPZ)

– No Perf Zones are sections of wellbore that will not be perforated until the permit is amended to remove the No Perf Zone

– The No Perf Zone is clearly labeled along the wellbore on the plat with a begin and end point

– The length of the No Perf Zone must be clearly shown on the plat


No Perf Zones- Isolating One Tract


No Perf Zones- Isolating Two Tracts

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No Perf Zones- Isolating When Parallel W/Special Rules


No Perf Zones- Isolating When Parallel WO/Special Rules


NPZ-Isolating When Parallel W/Special Rules

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No Perf Zones-Dual Spacing Compliance


No Perf Zones- Special Cases


Real Life Example✓ Unleased tracts are

shaded

✓ NPZ clearly identified by grey line over wellbore path

✓ Distances to unleased tracts clearly labeled to show SWR 37 compliance

✓ Last Take Point and BHL clearly labeled

Question: Is a SWR 37 exception required for this well?

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Real Life Example Explained

Proper placement of the take points and NPZ’s is key in order to have your application processed in a timely manner.


Notice By Publication

• NOA by Publication– Service list is required

• A good faith effort to locate all affected parties must be made

• A “due diligence” letter must be included explaining steps taken to locate all affected parties and requesting publication

• Notice will be sent to all parties with addresses

Note: The Entire notice must be published in a paper with general circulation in the county or counties where the well is located.


Notice By Publication-Timeline• NOA by Publication

– Notice is published once a week for two (2) consecutive weeks

– Per SWR 1.43, “The first publication shall be at least 14 days before the protest deadline in a notice of application

• If the first publication is done within seven(7) days of the date of issuance you will be in compliance

Note: If you are unable to get your notice to your newspaper within the first seven days of the notice being generated you must contact us to request a new issuance date. If you don’t meet the requirements of the rule you will have to re-publish the notice.

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Notice By Publication-Example


Drilling Permit Statewide Rule 37 & 38

• Important things to remember

– Certified plat with offsets clearly labeled

– Fields with special horizontal rules require you to flag the SWR 37/38 exception

• The permit could be held up if this isn’t done

– For permits requiring an exception to SWR 38 make sure you are selecting the correct notification parameters on the exception tab

– Call if you have questions before you file a permit


Contact Information

For more questions concerning SWR exceptions contact

Chris Houston 512-463-6751 [email protected]

Lorenzo Garza 512-463-6751 [email protected]

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