W. Va. Code R. § 39-1-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 39-1-4 - Operational Rules

4.1. Notices -- General and emergency.

4.1.1. Any written notice of intention to do work which requires the Commission approval or to change plans previously approved by the Commission must be filed with the Commission, unless otherwise directed, and must receive Commission approval before the work is begun.

4.1.2. In case of emergency or a situation where operations might be unduly delayed, any written notice or approval required by rule to be given to or received from the Commission may be given or received orally or by wire or electronically, and, if approval is obtained, the transaction shall be confirmed in writing within ten (10) working days as a matter of record. The Chair of the Commission may also call an emergency hearing in cases where operations might be unduly delayed, by filing a prior notice with the Office of the Secretary of State pursuant to the Open Governmental Proceedings Act in W. Va. Code § 6-9A-3. Included with any request for emergency hearing, the requesting party shall provide the Commission with the names, addresses and telephone numbers of all offset operators as defined herein. The Commission will make reasonable attempts to notify said offset operators.

4.2. Location of wells.

4.2.1 Vertical Deep Wells

4.2.1.a. To prevent waste, in the absence of an application for special field rules or special field rules ordered by the Commission establishing drilling units or authorizing different vertical deep well spacing or location patterns for a particular field or pool or parts thereof, each vertical deep well drilled shall be not less than 3,000 feet from an existing permitted vertical deep well location or from an existing well capable of producing hydrocarbons from the objective pool of the vertical deep well and no vertical deep well shall be less than 500 feet from a lease or unit boundary.

4.2.1.b. The Commission shall have the discretion to determine pattern location of vertical deep wells adjacent to an area governed by special field rules where there is sufficient evidence to indicate that the pool or reservoir spaced by the special field rules may extend beyond the boundary of the spacing order and the uniformity of the spacing pattern is necessary to ensure orderly development of the pool or field.

4.2.2 Horizontal Deep Wells

4.2.2.a. To prevent waste, protect correlative rights, and to prevent substantial harm to the public interest, in the absence of (i) an Operational Order, (ii) an application for special field rules or (iii) special field rules approved by the Commission establishing drilling units or authorizing different horizontal deep well spacing or location patterns for a particular field, pool, geographic area, or parts thereof, the productive interval of each new horizontal deep well shall be:

4.2.2.a.1. Unless otherwise agreed to, no less than 1,000 feet from the productive interval measured perpendicularly from a previously permitted deep well operated by a different operator;

4.2.2.a.2. No less than 800 feet from the productive interval measured perpendicularly from a previously permitted deep well operated by the same operator;

4.2.2.a.3. Unless otherwise agreed to, no less than 500 feet from a lease or unit boundary measured perpendicularly for wells where the adjoining lease or unit is operated by different operators;

4.2.2.a.4. No less than 400 feet from a lease or unit boundary measured perpendicularly for wells where the adjoining lease or unit is operated by the same operator;

4.2.2.a.5.Provided, That the distance between the productive interval nearest the heel or toe of a new deep well shall be no less than 150 feet from the productive interval nearest the heel or toe of a previously permitted deep well and no less than 75 feet from a lease or unit boundary; and

4.2.2.a.6.Provided further, That no spacing limitations shall exist for non-productive intervals before or after the productive interval in a horizontal deep well.

And provided further, That in circumstances where two or more operators agree in writing to lesser spacing than required in subdivisions (1) and (3) above, such lesser spacing shall not be less than the minimum spacing established in subdivisions (2) and (4), respectively, above.

4.2.2.b. Horizontal deep well unit sizes may exceed 640 acres provided that the unit size is no greater than the area covered by the entire length of the well or the productive interval, plus the length of the toe and heel setbacks pursuant to subsection 4.2.2.a, multiplied by the lateral spacing between wells, plus 10%. Unit size may also be increased beyond the 10% to minimize waste. Horizontal deep well units shall be designed such that the area encompassing the non-productive interval(s) is included in at least one (1) unit; but overlapping unit boundaries should be avoided. Multiple horizontal well units, voluntarily formed, are allowed under the same guidelines as single horizontal well units.

4.2.2.c. The Commission, at the request of an operator, may establish a geographic area by formation or formations, establishing an Operational Order for horizontal deep wells. Any operator intending to apply for an Operational Order, shall submit to the Commission an application for Operational Order on a form developed by the Commission along with a request for public hearing which shall include the applicant's name, address, description of the area, map generally depicting the area to be covered by the request, requested well spacing and setback distances from lease or unit boundaries, and the geological formation or other formations to be considered for the Operational Order. The map should be of a scale sufficient to identify the area for a Class II legal advertisement.

4.2.2.d. The Commission shall set a day, time, and place for the public hearing to be not less than twenty (20) days but no more than forty-five (45) days. The Commission shall provide written notice of the application for Operational Order to operators having permits issued within the proposed area of the Operational Order and publish a Class II legal advertisement in the county newspapers for which the proposed Operational Order would affect stating the date, time, and location of the public hearing to consider the application for an Operational Order. In addition to the opportunity to appear, any operator may file written comments on the application for an Operational Order.

4.2.2.e. At the hearing any operator within the requested area or offset operator affected by the request as to the spacing of deep wells within the requested Operational Order area may present evidence. That evidence shall be technical in nature and define characteristics of the reservoir to be covered by the Operational Order.

4.2.2.f. Within 45 days after the application for the Operational Order has been filed, the Commission shall issue an Operational Order for a defined area or dismiss the application, after considering all the evidence presented in support and in opposition to the Operational Order. The Operational Order may be amended from time to time, after notice and public hearing, by the Commission at the request of one or more operators having operating rights in the oil and gas in the area covered by the Operational Order.

4.2.2.g. The Operational Order will: define the area to be covered by the order, establish minimum horizontal well spacing, to include distances between laterals which will be controlled by the same operator, establish minimum distances between wells adjacent to other operators, establish minimum lease or unit boundary setbacks parallel to the lateral and at the toe and heel, toe to toe, heel to heel, or toe to heel setbacks for units of the same operator, establish minimum lease or unit boundary setbacks parallel to the lateral and at the toe and heel, toe to toe, heel to heel, or toe to heel setbacks for units in cases where different operators are involved. The commission will also define setbacks where in order to conform to the location of other wells and to prevent waste, a wellbore may be drilled but not completed/stimulated in a section of that wellbore. However, the minimum spacing shall not apply to any portion of the wellbore other than the productive interval in the target formation unless either the Department of Environmental Protection Office of Oil and Gas or the Commission reasonably determines there is a safety concern with the drilling plan.

4.2.2.h. Operators within the Operational Order area may enter into a written agreement setting agreed upon lateral, toe, and heel spacing so long as they do not reduce that spacing below the minimum distances allowed for horizontal deep wells controlled by the same operator as set by the lesser of subsection 4.2.2.a or the Operational Order for that area. The executed memorandum of agreement with the spacing terms must be submitted to the commission with each application for which the operator is relying on the agreement.

4.2.2.i. The Operational Order for the defined area shall be enforceable until amended by a new Operational Order covering that area or part thereof which may be requested by any operator within the defined area or offset operator affected by the Operational Order.

4.2.2.j. Exceptions to the Operational Order spacing may be granted by hearing under the provisions of 4.3 of this rule.

4.3. Exception to location of wells.

4.3.1. When exception to Rule 39-1-4.2 of this rule or a special field rule applicable to the location of deep wells is desired, the operator shall file a supplemental application to the application required by Rule 39-1-4.4.

4.3.2. The supplemental application shall be accompanied by a plat or sketch, with appropriate coordinates, drawn to the scale of 1 inch equaling to 2,000 feet accurately showing to scale all other completed, drilling or permitted deep oil and gas wells on said property or surrounding property within a distance of 2 miles if the plat or sketch submitted under subsection 4.4 of this rule does not accurately reflect the hereinabove information. The plat shall show:

4.3.2.a. The location at which a deep oil or gas well could be drilled in order to be in compliance with the applicable order, or rule;

4.3.2.b. The location at which the applicant requests permission to drill; and

4.3.2.c. The location at which deep oil or gas wells have been drilled or could be drilled in accordance with the applicable Operational Order, special field order or rule, directly or diagonally offsetting the proposed exception.

4.3.3. The Commission, after notice and hearing, may grant or deny the application and require the withholding or approve issuing of a permit pursuant to subsection 4.4 of this rule.

4.3.4. No exception shall prevent any operator from drilling a deep oil or gas well on adjacent lands, directly or diagonally offsetting the exception, at locations permitted by any applicable Operational Order or special field rules ordered by the Commission.

4.4. Application for permit.

4.4.1. All complete applications, as established by the Office of Oil and Gas and field reviewed by Office of Oil and Gas inspectors, to be submitted to the Chief of the Office of Oil and Gas for a permit to drill, re-drill, stimulate, operate, plug, abandon, deepen, case fracture, pressure, convert or combine any deep well, or physically change any deep well to allow the migration of fluid from one formation to another shall first be reviewed by the Commission or by an authorized agent to ascertain compliance with this rule. The Commission will provide the Chief of the Office of Oil and Gas with a statement either approving or disapproving the application based upon the applicant's compliance with Oil and Gas Conservation rules, statutes, and orders. The permit will be issued by the Chief of the Office of Oil and Gas when the applicant has complied with this rule. The application shall contain, or show by plat or sketch, in addition to the requirements of this rule, the following:

4.4.1.a. For all wells permitted pursuant to W. Va. Code § 22C-9-7(b), a certificate of consent and easement from all owners of the surface of the tract on which the deep well is to be drilled;

4.4.1.b. A tabulation of all deep wells within 1 mile of the proposed location, including the API number of the deep well, well name and the name and address of the operator;

4.4.1.c. Shown on a plat for a proposed deep well location in an area covered by special field rules, the boundaries of the drilling unit, the distances from the proposed deep well location to the nearest outside boundary and the acreage of each tract within the drilling unit. Such plat shall accompany the application and shall be drawn to a scale of 1 inch to 2,000 feet. The plat shall be prepared by a licensed land surveyor or registered engineer showing the district and county in which the tract of land upon which the well to be drilled is located, the acreage of the tract, the name of mineral owners or lessees of adjacent tracts, the proposed or actual location of the well determined by survey, the courses and distances of such locations from two (2) permanent points or landmarks on said tracts and the number to be given the deep well. The plat will show all deep oil and gas including abandoned deep oil and gas wells within 1 mile of the proposed or actual deep well for which a permit is being sought and the distances to each;

4.4.1.d. Any other information which the Commission, by order, rule or policy, may require to perform its statutory duties.

4.4.1.e. In addition, the operator shall schedule with the Commission staff, a reclamation plan review prior to filing a deep well permit application. And shall prepare a well site safety plan and conduct a pre-spud meeting prior to beginning drilling operations on any deep well; and

4.5. Annual report of oil and gas production.

4.5.1. For each deep oil or gas well, an annual report of production by month shall be filed with the Commission. The report will be filed on or before the succeeding March 31st. The report will be filed regardless of the status of the deep well.

4.5.2. The report to be submitted by the operator or a person specified by the operator shall include the operator's name, place of business, lease or well name, API number (composed of state, county and permit number), days produced during the report month, volume of oil measured in barrels or gas measured in thousand cubic feet, and other pertinent information as the Commission, by rule, may require in the performance of its statutory duties.

4.6. Filing of well logs.

4.6.1. Within ninety (90) days after the completion of drilling or recompletion of a deep well, the operator shall submit to the Commission copy of the well log and the electrical, radioactive or other similar conventional log if they have been run. In addition, as soon as practicable, and upon the request of the Commission, operators shall file a copy of drill stem test charts, formation water analysis, porosity, permeability or fluid saturation measurements, core analysis and lithologic log or sample description as compiled: Provided, that no such information shall be required unless the operator has compiled such information in the ordinary course of business. No interpretation of the data is to be filed.

4.6.2. All information furnished to the Commission hereunder with respect to a deep well marked "confidential" shall be kept confidential for one (1) year after the date the information is required to be filed hereunder, unless the owner gives written permission to release such information at an earlier date. For good cause shown by the operator the Commission may extend the period of confidentiality for a one (1) year period. The total period of confidentiality shall not exceed three (3) years.

4.7. Measurement of oil.

4.7.1. The volume of production of oil shall be computed in terms of barrels of clean oil on the basis of meter measurement or tank measurements of oil level difference, made and recorded to the nearest 1/4 inch of one hundred percent (100%) capacity tables, subject to the following corrections:

4.7.1.a. Correction for impurities. -- The percentage of impurities (water, sand and other foreign substances, not constituting a natural component of the oil) shall be determined to the satisfaction of the Commission and the observed gross volume of oil shall be corrected to exclude the entire volume of such impurities; and

4.7.1.b. Temperature correction. -- The observed volume of oil corrected for impurities shall be further corrected to the standard volume at sixty (60) degrees Fahrenheit in accordance with A.S.T.M.D. - 1250, Table 7, or any revisions thereof and any supplements thereto or any close approximation thereof approved by the Commission.

4.8. Measurement of Gas. -- All gas except gas used on the lease for development purposes and lease operations or free gas, when produced or sold shall be measured by an approved meter of sufficient capacity. The standard pressure base for reporting purposes shall be 14.73 psia regardless of atmospheric pressure at the point of measurement and the standard temperature base shall be sixty (60) degrees Fahrenheit.

4.9. Multiple pool completion or commingling in one (1) vertical deep well bore.

4.9.1. In the absence of special field rules, an operator will, within seventy-two (72) hours after commencing to complete a vertical deep well in more than 1 pool, file written notice to the Commission of the intended multiple completion. Within fourteen (14) days after the multiple completion and before any production for the vertical deep well is marketed, the operator shall file a report stating whether the production is segregated or commingled, include a diagrammatic sketch of the mechanical installation, name and address of the operators and a plat showing the location of the vertical deep well and deep wells within (1) one mile of the deep multiple completion well which have been or may be capable of being completed in the same pool or pools.

4.9.2. The operator will provide, by certified mail, a copy of the report to all offset operators. The operator shall provide the Commission with the certified mail receipts. If, within fifteen (15) days no protest is received and the Commission determines no waste will result from the completion, the completion will be approved without notice and hearing.

4.9.3. In the event the pools are segregated, the Commission may require tests as it deems necessary to determine the effectiveness of the segregation of the different producing pools.

4.10. Intentional and unintentional deviation in drilling vertical deep wells.

4.10.1. Before beginning intentional directional drilling of a vertical deep well, other than sidetracking due to hole conditions, when the intent is to direct the bottom of the hole away from the vertical, notice of intention to do so shall be filed with the permit application and approval obtained. Such notice shall state clearly name and address of operator, the deep well's API number, lease name, field or pool, county, the depth, exact surface location of the well bore, proposed direction of deviation and proposed horizontal distance between the bottom of the hole and surface location, reason for intentional deviation and a list of offset operators. Except as provided for in § 39-1-4.1, the Commission shall notify offset operators of the applicant's plan and hold the notice ten (10) days. If objection is received, the application will be set for public hearing. If no objection is received, the application shall be approved. If approval is obtained, the operator shall file, with the Commission within sixty (60) days after the completion of the work, an accurate and complete copy of the directional survey.

4.10.2. In all deep wells, all operators shall, when the safety of the well bore is not in jeopardy, survey their well bore for unintentional deviation from the vertical at least every 500 feet or every bit change if less than 500 feet, but no more frequently than 250 feet. The operator shall calculate the cumulative random drift of the bore hole from such survey as drilling progresses. The operator shall file a copy of such record within sixty (60) days after completion of the drilling operation and before sale of hydrocarbons is made from the well.

4.10.3. In the event safety precludes a survey being performed as described above, the operator shall, at the Commission's request, before completion of drilling operations and before sale of hydrocarbons is made from the well, run cased hole deviation surveys or directional surveys on the well bore.

4.10.4. In all deep wells, should the operator calculate or have reason to suspect the cumulative random drift exceeds the surface distance of the well from the nearest drilling unit or lease boundary, the operator shall run a directional survey on the bore hole to determine where the bore hole actually lies and file a copy of such record within sixty (60) days after completing the survey and before the sale of any hydrocarbons is made.

4.11. Production potential, shut-in pressure and gas-oil ratio testing and reports. -- Production potential, shut-in pressure and gas-oil ratio testing and reporting may be required by the Commission to perform its statutory responsibilities. In deep well gas testing, the methods prescribed in the Interstate Oil Compact Commission's "Manual of Gas Well Testing" shall be used.

4.12. Gas-oil ratio test. -- Each operator shall take a gas-oil ratio test not later than thirty (30) days following the completion or recompletion of any deep well producing from a pool which contains both oil and gas. The results of such test shall be reported to the Commission within fifteen (15) days after the completion of the test. Upon request, the Commission may waive or extend the time for making a gas-oil ratio test. Additional tests may be taken at any time and shall be taken as required by the Commission to perform its statutory responsibilities.

W. Va. Code R. § 39-1-4