15A NCAC 05D .0106. WELL SPACING

(a)  The director shall not issue a permit for the drilling, deepening or plugging back of any well for the production of oil or gas unless the proposed well location and spacing conform to the rules of the department.  These Rules do not apply to wells drilled for geological information, stratigraphic testing, fluid injection or disposal or storage of natural hydrocarbons.

(b)  Upon completion of a discovery well within a new pool or reservoir, the department shall consider and adopt after public hearing, temporary well spacing and drilling units.  The rule shall be designed to result in drilling the smallest number of wells necessary to determine within the shortest possible time, all information pertaining to the reservoir and its contained fluids, in order to determine the proper permanent plan of drilling wells on, and allocating production to the various separate leaseholds within the reservoir.  When such information has been obtained and after public hearing, the department shall adopt permanent rules including:

(1)           minimum size unit on which one well may be drilled,

(2)           method of determining total allowable for the pool,

(3)           method of allocating and distributing total allowable among various separate leaseholds on pooled units so that correlative rights and equity will be protected,

(4)           minimum distance from separate leasehold or pooled unit and between wells to the same reservoir.

(c)  An exception to the general rules or special rules may be granted by the director upon application and after public hearing, if it is shown that more hydrocarbons can be recovered under the lease‑hold by such exceptions.  The exceptions may be granted because of:

(1)           topographical conditions, both natural and manmade;

(2)           geologic conditions, faults, etc.;

(3)           other conditions accepted as pertinent by the director.

(d)  The allowable of such off pattern wells may be adjusted to protect the correlative rights of offset operators and land owners and to conserve the resource.

(e)  When separately owned tracts are embraced within a single drilling unit, the involved persons may pool their interests or in the absence of voluntary pooling, the director, for the prevention of waste or to avoid drilling unnecessary wells, may order pooling of all interests.  Each such pooling order shall be made after a public hearing held by the director which shall determine the following:

(1)           equitable share of oil or gas in the pool for each owner,

(2)           operator of pooled interest,

(3)           drilling and operating costs and provision for equitable distribution of the costs among owners,

(4)           penalty allowable of any owner who refused to pay his share accordingly.

 

History Note:        Authority G.S. 113‑391;

Eff. February 1, 1976;

Amended Eff. October 1, 1984.