WEBVTT

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<v ->Good afternoon, everybody.</v>

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Thanks for joining me this afternoon.

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And I want to thank David Keane,

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who most of you probably sat in

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on that earlier presentation.

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He did a very good job of covering a lot

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of important information,

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and we'll probably be
touching again on a lot

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of that information, because
as David mentioned, you know,

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some of the information you
covered was very basic stuff,

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but we see a lot of
mistakes that are made

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on this basic stuff.

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So hopefully by going
through this presentation,

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we can resolve some of those issues

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and get you applications
out in a more timely manner.

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So the presentation
will be available online

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at the URL that you
see on your screen here,

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it's also placed in the Q and A section.

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So you can go grab it
from there if you need to.

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This afternoon David and Aaron Pratt

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from the drilling permits department

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will be manning the Q and A portion.

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So feel free to post any
questions you'd like there.

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And we also have an
attendance Jacqueline Teseney,

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who's a team lead into our
well compliance department

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because sometimes a lot of
the information that we cover

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can kind of morphing and
move into different areas.

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And if you've got something
that could potentially be

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well compliance related,
she's going to be available.

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And hopefully can answer
that question for you.

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So we're going to go
ahead and get started,

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and some of the things that
we've noticed where we have a

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lot of our issues is
concerning terminology,

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how we speak to each other.

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You in industry use certain
terms that may be different

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the way the Commission uses it,

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or you don't use some of the
terms that the Commission uses.

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And so hopefully we'll go over some

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of those and clear up what
we're, what we mean and what we,

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what we need from you
concerning some of those issues.

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We're gonna talk about
plain old issues with our W1s,

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our plats notification issues.

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And then we'll end this all up

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with our exception
resolutions discussion.

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So David did a really
good job of covering some

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of this, but again, just to
explain what some of these are.

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So a new drill is any
proposed new operation,

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you know, there should
be currently no propose

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or existing wellbore at that location.

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If there is,

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and you're attempting to
go back in and do some work,

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then that would typically
be a re-completion.

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So the well has already been
completed and you're attempting

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to plug back or deepen into
a different regulatory zone.

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A new permit would be
needed for that operation.

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And where we see a lot of disconnect

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between industry and the Commission

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is in between what a re-completion
is and what a reentry is.

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So remember if you're filing a re-entry,

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that permit is going to be for a permit

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to go back into a well that
has been plugged to surface.

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And that's the important key,
there are re-completion that,

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well as to that, there
is still on schedule.

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It may be shut in and may be
completed in a different field,

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but it hasn't been plugged to surface.

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A re-entry has been plugged to surface,

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and therefore it should be,

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your purpose of buying
would be a re-entry

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for that type of operation.

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And these again are all things

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that are actively being done by you.

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There's actual work going
to be done to these wells.

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The next examples are more
to correct the classification

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of a well where there's
no work being done.

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We're just trying to correct the records

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that we currently have,
and that could fall under

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as a re-class, which it
means that we're changing say

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an oil well to a gas well,

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and specifically in a field
where the rules are different.

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We can be going from a disposal

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or injection well to a producer.

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We could be going to vice
versa from injection producer

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to injection, but we may
need to put it in a different field

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to carry it in our own schedule.

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So typically we're changing
the classification of the well,

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but we're not necessarily
doing any work to the well.

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And then we have a field transfer.

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So a field transfer is
we have a well that's

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on schedule and an existing field.

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And for whatever reason
you think that now that well

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should be put into a different
field that maybe the rules

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are a little bit better.

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You thought you, when
you targeted a field,

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that it would be field A
and you ultimately needed

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field B and so now, you
want to correct the information.

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So you would go through
our engineering unit

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and submit a request for
permission to file a permit.

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Cause again, this is a twofold thing.

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You get your permission from those guys

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to move it from fuel data fuel,

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be they're going to review
your documentation to make sure

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that it is a valid reason
to transfer that well,

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you will submit a permit application

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to get an approved
permit for that field.

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And then you'll be filing
completion paperwork to ultimately

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get that well into the appropriate field

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that you want it to be in now.

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So a lot of what we see

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when we're working on
applications, you know, the,

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it has flipped in the last 10
years, you know, 10 years ago,

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we were predominantly doing
vertical wells, now, you know,

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75% of the applications we're processing

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are horizontal wells.

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And so it's really important

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the understand the
basics of a horizontal wells

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because this falls into
issues with the plats issues,

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with information on the W1

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and issues as it pertains to rule 37,

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so it's really important to understand

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these five basic components
of a horizontal well.

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We have the service location,
we've got a Penetration Point.

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We have a first and last take point

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and we have a terminus location.

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Now these could be five
distinct points on that well,

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or they could be combined.

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You know, sometimes we have the surface

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and Penetration Point at
the same location, you know,

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we could have the Penetration
Point and the first take point

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at the same location.

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And we've had the last take
point and the terminus location

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at the same location.

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But what's important
is that if they are distinct

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or they are combined
unit clearly labeled those

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on the plat, because
if they're not labeled,

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then you could potentially
give us information

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that is incorrect for the
question being asked

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and could trigger a rule 37,
and as David showed you

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in that last slide,
when those last slides,

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if you give us the wrong information,

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that triggers an exception,

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well that's money that doesn't
get returned back to you.

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So again it's important to understand

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what it is we're asking
and what you're trying,

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what information
you're trying to give us.

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And so we have a horizontal drain hole.

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How's that difference
from a horizontal well?

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Well for us at the Commission,

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that drain hole is that
portion of the well that you can

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actually produce from
within the corelative interval

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of the field you're applying for.

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So you'll see field rules

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where it talks about acreage assignments

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and it's based on that
affected drain hole link,

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whatever you you're able
to perforate in that well,

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that's what helps determine
what aprons you can assign

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to a well, and also

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it's that portion of the well
where those take points are,

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which are perforations within your well

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that allow hydrocarbons
to flow into your well.

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And it's those points
that we're evaluating

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for rule 37 to ensure you're
meeting the requirements

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of the field the well's
being drilled into.

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So again, that here's an example,

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and this is one that you probably saw

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with David's presentation.

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We had this descriptive
diagram of a horizontal well,

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and so we clearly can see
where the well penetrates the

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formation, which is
that top of the pink box.

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We see where the first and
last take point are on the well.

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And we clearly see where the
terminus is located, so again,

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if these are going to be

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distinct different points on the well,

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we need to make sure they're
clearly identified on the plat.

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So when we're talking about exceptions

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and sometimes we'll
send out problem letters

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and we'll get a response
back, what's an offset,

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don't understand what
an offset operator is.

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well, when we're referring
to an offset and this could be

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in relations to a rule 37, 38 exception,

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it could be in relation to an
off-lease Penetration Point,

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or it could be we're
a rule 40 notification,

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but it refers to any operator,

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lessee of a tract or the unleased
mineral owner of the tract

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in which is being
affected, so if it's a rule 37,

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it could be the tract adjacent

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to the well, if it's a rule 38,

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it could be any one of those parties

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around the entire lease or pooled unit.

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If it was a rule 40,

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it could be somebody
that's within a half mile

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of the wells, but that's
what we're referring to

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when we're talking about an offset.

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It's those affected
parties that are being

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have required to be noticed,

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or that you're going to
have to provide a notice to

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based on whatever exception
or rule is requiring that.

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A waiver is a letter that you're sending

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to those affected parties,

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requesting that they waive their rights

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or give you the
authority to do something.

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So it's a rule 37.

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It could be a simple as you asking them

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to waive their rights
for the rule 37 exception.

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If it's a Penetration Point issue,

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then you're sending
that letter, you know,

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explaining what it is you're trying

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to do, why they need to sign that letter

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and what's going to happen
if they do sign that letter.

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And then again the
effected party is determined

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by whatever Statewide rule or fuel rule.

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The reason for the notification
or exception is required.

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But those affected parties or
those offsets, one in the same

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that are an operator, a
lessee or only some mineral.

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So those are very important
concepts to remember because,

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you know, Chris Houston who
primarily works on exceptions

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sends out problem
letters daily on this topic.

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And so if we can get this kind

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of issue resolved and get it up front,

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then we can be more quick and efficient

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in getting you an approved
permit or a notice that goes out

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that you then need to
wait a timeframe in order

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for that to run and then
hopefully not get protested.

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And then you're able to drill a well.

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All right, so now we're
gonna kind of jump

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into our form W1 issues.

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So what I like to tell folks

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when I get new employees coming in,

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or when we're talking to you filers

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is that plat is a mirror of your W1.

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The majority of the
information that is required

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on the plat is being captured
on the form somewhere.

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And so they need to match up.

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So you need to understand
what state module five is.

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And David explained some
of what that is earlier and verify

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that your plat satisfies the
requirements of that rule.

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And use that information
that is on the plat

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to fill out your W1, because
if you're pulling information

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from someplace else
and it isn't on the plat,

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that's one of the first things
we're going to do is send you

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a problem and say, wait a minute,

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we see this information on your W1.

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We don't see that
information on the plat.

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We see different information,
which is correct, you know?

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So be cognizant of that, and
then remember that again,

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that most of that information
that's on the plat is going

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to be required on that W1 someplace.

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And so here's some of those requirements

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that are listed under
Statewide rule five.

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Now your plat must
be of a specific scale.

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Hopefully a whole number
scale, one inch to a thousand,

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one inch to the 2000,
one inch to 500, you know.

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We don't want to see a plat
that's one inch to 383 feet

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cause we don't have an
engineering scale that we could use

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to determine if the
information you're giving us

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is correct and accurate.

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We need to see a scale
because obviously we need

00:12:58.610 --> 00:13:01.880
to know if we need to measure
what we're measuring against.

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We need to know, see the north arrow,

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cause we need to make sure

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that we have your plat
aligned in the way it should be

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to determine if it's matching
what our systems are showing.

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We need to make sure
that the current operator,

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the current lease name,

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the size of the unit or lease
the county at the well, is in,

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is clearly labeled and on the plat.

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And this is really important
because you know,

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there's a lot of folks who
take over leases are coming in

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and filing re-completions permits,

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or re-entry permits on
existing wells and are just going

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back into the old well files
and trying to reuse older plat

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that was submitted back in 1970,

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which isn't a problem as
long as you clearly label

00:13:48.820 --> 00:13:51.520
and identify all the current information

00:13:51.520 --> 00:13:55.790
because I don't care or want
to know that it was John Smith

00:13:56.805 --> 00:13:59.670
who filed this plat 20 years ago.

00:13:59.670 --> 00:14:02.260
I want to know that it
was Mary Jane today

00:14:02.260 --> 00:14:05.200
who was filing for this application.

00:14:05.200 --> 00:14:08.420
So it all must reflect
the current operator,

00:14:08.420 --> 00:14:13.360
lease name, acreage, and
again, the pertinent information

00:14:13.360 --> 00:14:16.550
that's required under
Statewide rule five.

00:14:16.550 --> 00:14:21.270
If the plat is supporting the first well

00:14:21.270 --> 00:14:23.420
on a lease or a pooled unit,

00:14:23.420 --> 00:14:26.470
then we need to make
sure that if the plant

00:14:26.470 --> 00:14:29.750
that you're using doesn't
show the entire lease or unit,

00:14:29.750 --> 00:14:32.580
we need to have an
accompany plat that does

00:14:32.580 --> 00:14:35.120
cause we need to be able
to see the entire boundary,

00:14:35.120 --> 00:14:38.340
have that on record for that first well

00:14:38.340 --> 00:14:40.260
on that lease or unit.

00:14:40.260 --> 00:14:45.110
If you're in a oddly shaped,
you have an oddly shaped lease,

00:14:45.110 --> 00:14:47.500
then we would like to
see that there's some sort

00:14:47.500 --> 00:14:50.910
of highlighting or hatching
around the boundary

00:14:50.910 --> 00:14:52.840
that's going to help
describe it, you know,

00:14:52.840 --> 00:14:55.410
very typically we'll see a plat

00:14:55.410 --> 00:14:58.700
that's showing a 640 acre section.

00:14:58.700 --> 00:15:03.480
And then the application
states, it's a 320 acre lease.

00:15:03.480 --> 00:15:05.669
Okay, well where within that 640 acres

00:15:05.669 --> 00:15:08.450
is your 320 acre lease

00:15:08.450 --> 00:15:10.780
if you're not clearly identifying that?

00:15:10.780 --> 00:15:14.240
So again, make sure
that you clearly identify

00:15:14.240 --> 00:15:15.810
where your lease is.

00:15:15.810 --> 00:15:19.090
And most importantly, this
is a fairly new requirement.

00:15:19.090 --> 00:15:21.540
We've had this for
about five years or so.

00:15:21.540 --> 00:15:24.010
You need to have the GPS coordinates

00:15:24.010 --> 00:15:26.173
of the service location on the plat.

00:15:27.020 --> 00:15:30.510
And then as David
mentioned that the form

00:15:30.510 --> 00:15:32.530
that is on the plat should be the form

00:15:32.530 --> 00:15:34.580
that you're using on the W1.

00:15:34.580 --> 00:15:37.750
You know, we see, like David said,

00:15:37.750 --> 00:15:39.910
I don't understand how are
you getting the information

00:15:39.910 --> 00:15:41.260
if it's not from the plat,

00:15:41.260 --> 00:15:43.620
but you're using something
completely different.

00:15:43.620 --> 00:15:46.570
We have degrees, minutes,
seconds on the plant,

00:15:46.570 --> 00:15:49.847
but then you're using decimal
degrees on the form W1.

00:15:49.847 --> 00:15:51.451
And so it's like, okay, well,

00:15:51.451 --> 00:15:53.470
where does this information coming from?

00:15:53.470 --> 00:15:56.800
We're going to probably ask
you to verify what it should be.

00:15:56.800 --> 00:15:58.200
So to make it easy,

00:15:58.200 --> 00:16:01.143
make sure you're using the
information that's on the plat.

00:16:04.610 --> 00:16:07.280
And again, David did a
really good job with this,

00:16:07.280 --> 00:16:10.890
but we're going to harp
on it again and I say harp

00:16:10.890 --> 00:16:12.380
but we're going to talk
about it a little bit more

00:16:12.380 --> 00:16:13.890
because it is important.

00:16:13.890 --> 00:16:16.370
And it's understanding
what perpendicular

00:16:17.259 --> 00:16:20.450
and where that perpendicular
call must be from.

00:16:20.450 --> 00:16:23.280
So as David stated
under Statewide rule five,

00:16:23.280 --> 00:16:26.150
and we're trying to capture
information where those points

00:16:26.150 --> 00:16:28.150
on the, well, if it's a vertical well,

00:16:28.150 --> 00:16:30.970
if it's a directional well,
we're looking at that,

00:16:30.970 --> 00:16:34.610
the surface and the bottom
hole, if it's a horizontal well,

00:16:34.610 --> 00:16:36.330
then we're looking at those five points

00:16:36.330 --> 00:16:38.070
that we're talking about.

00:16:38.070 --> 00:16:43.020
The calls are coming from
the line that we're using,

00:16:43.020 --> 00:16:45.870
be it a survey line, or at leased line,

00:16:45.870 --> 00:16:48.360
and as close to a 90 degree angle,

00:16:48.360 --> 00:16:51.800
as we can to that point on the well.

00:16:51.800 --> 00:16:53.920
And that's because if you know,

00:16:53.920 --> 00:16:57.030
we were 20 years ago before we had GIS,

00:16:57.030 --> 00:16:59.760
and before we had
electronic maps, you know,

00:16:59.760 --> 00:17:03.540
this information was plotted
out on a Linden map, you know,

00:17:03.540 --> 00:17:06.760
we actually had big old Linden
maps that we use portrayed

00:17:06.760 --> 00:17:10.110
as information on, and
so if you're giving us a call,

00:17:10.110 --> 00:17:12.690
that's coming up at a 45 degree angle,

00:17:12.690 --> 00:17:15.330
how accurate are we
going to be able to spot that

00:17:15.330 --> 00:17:18.840
in there, but we can be if it's
coming at a 90 degree angle

00:17:18.840 --> 00:17:19.770
from those lines.

00:17:19.770 --> 00:17:22.080
And so that's why the requirement is

00:17:22.080 --> 00:17:26.460
in there for that 90 degree description

00:17:26.460 --> 00:17:29.093
in the information
for Statewide rule five.

00:17:30.500 --> 00:17:33.660
But then again, now when
we're talking about rule 37,

00:17:33.660 --> 00:17:38.220
depending on the type
of field you're applying for,

00:17:38.220 --> 00:17:40.380
that 90 degree angle is flipped.

00:17:40.380 --> 00:17:44.053
And now we're talking about
from that point on the well,

00:17:44.890 --> 00:17:48.610
to the appropriate line that
we're identifying in this case,

00:17:48.610 --> 00:17:52.290
typically a leased line that
we need to have that 90 degree

00:17:52.290 --> 00:17:56.000
angle from, you know,
very typically you may have,

00:17:56.000 --> 00:17:58.460
you're familiar with Spraberry
Trend field, for instance,

00:17:58.460 --> 00:18:01.027
we have a hundred foot
first and last take point

00:18:01.027 --> 00:18:03.110
and 330 perpendicular.

00:18:03.110 --> 00:18:07.140
So we need to know along
that wellbore path that you're

00:18:07.140 --> 00:18:12.140
330 feet away from any
potential external lease line

00:18:12.530 --> 00:18:16.050
or internal lease line
if this was a pool unit.

00:18:16.050 --> 00:18:17.513
We don't care that it, where,

00:18:18.349 --> 00:18:21.490
you know, you could be
providing calls that are the same,

00:18:21.490 --> 00:18:23.580
because if you're in a perfect square

00:18:23.580 --> 00:18:27.660
and you're running at a
perfect angles from those lines,

00:18:27.660 --> 00:18:29.300
those calls could be one and the same,

00:18:29.300 --> 00:18:32.240
but we'll see an example
where if I'm in an irregularly

00:18:32.240 --> 00:18:36.210
shaped survey and I have
an irregularly shaped lease,

00:18:36.210 --> 00:18:38.253
that that's not going to be the case.

00:18:41.780 --> 00:18:44.123
So here we go, so if we look at,

00:18:48.190 --> 00:18:50.173
we look at this information here,

00:18:51.653 --> 00:18:54.180
so what we have in red here,

00:18:56.134 --> 00:18:57.910
it's hard to see, it's that line,

00:18:57.910 --> 00:19:00.690
but there's a line that's
coming right through here,

00:19:00.690 --> 00:19:03.570
and that's my Statewide rule five call.

00:19:03.570 --> 00:19:08.570
So I'm 278 feet from
this point to that line.

00:19:09.750 --> 00:19:12.590
Or that line to that
point, I should say,

00:19:12.590 --> 00:19:16.330
but for rule 37 purposes,
this is my first take point,

00:19:16.330 --> 00:19:19.910
I need to be 330 feet perpendicular.

00:19:19.910 --> 00:19:23.090
So you can see that line
there that's perpendicular

00:19:24.320 --> 00:19:28.603
and at 330, so if I were
to have just to put 278,

00:19:29.780 --> 00:19:31.530
that would have
triggered a rule exception

00:19:31.530 --> 00:19:33.870
because you had to be 330

00:19:33.870 --> 00:19:38.515
and you would have been
given us money, right?

00:19:38.515 --> 00:19:40.513
And we don't want you to give
us money unless you have to.

00:19:41.400 --> 00:19:44.380
But if you would only
use 330, if you know,

00:19:44.380 --> 00:19:49.280
for whatever reason we
had to use this information

00:19:49.280 --> 00:19:53.100
to input that location
into a map, it would be off

00:19:53.100 --> 00:19:56.820
because again, we're
spotting in our systems,

00:19:56.820 --> 00:19:59.380
you usually take that
information and plot it

00:19:59.380 --> 00:20:02.190
at a 90 degree angle from
the lines we're trying to use.

00:20:02.190 --> 00:20:04.150
So that's why it's
important that we have

00:20:04.150 --> 00:20:08.440
that as close to 90
degree call as we can.

00:20:08.440 --> 00:20:13.440
And here in the second
example, the angle is such that,

00:20:13.600 --> 00:20:15.510
you know, we're almost
the same, you know,

00:20:15.510 --> 00:20:19.520
here's my rule five call at 927 feet.

00:20:19.520 --> 00:20:22.893
Here's my rule 37 call.

00:20:22.893 --> 00:20:25.230
You can see that set a 90 degree angle

00:20:25.230 --> 00:20:27.063
to that point it's 937.

00:20:28.220 --> 00:20:29.559
So it was very close.

00:20:29.559 --> 00:20:32.859
It one were to have
you just one of these,

00:20:32.859 --> 00:20:34.940
that may not have been so bad

00:20:34.940 --> 00:20:38.680
because neither call would
have triggered a rule exception.

00:20:38.680 --> 00:20:39.540
And so we, you,

00:20:39.540 --> 00:20:41.880
we probably could have
just used one of these calls,

00:20:41.880 --> 00:20:44.440
but in the case of the
first example, you know,

00:20:44.440 --> 00:20:45.770
we need to make sure we have both,

00:20:45.770 --> 00:20:48.910
because one of those calls
would have triggered a rule 37

00:20:48.910 --> 00:20:51.226
if it was used in appropriately,

00:20:51.226 --> 00:20:53.610
so we kind of say, it's very,

00:20:53.610 --> 00:20:55.690
it could be a little complicated

00:20:55.690 --> 00:20:57.890
when we're looking at
these types of issues.

00:21:00.660 --> 00:21:04.400
So again, we're talking
about our plats, you know,

00:21:04.400 --> 00:21:08.150
we're talking about making
sure that the boundaries are

00:21:08.150 --> 00:21:10.180
clearly identified on the plat.

00:21:10.180 --> 00:21:15.180
For horizontal wellbores,
making sure those five main parts

00:21:15.570 --> 00:21:17.533
are identified on the plat.

00:21:18.989 --> 00:21:23.930
Again, if my Penetration
Point is labeled on the plat

00:21:23.930 --> 00:21:26.900
and my terminus location
is labeled on the plat,

00:21:26.900 --> 00:21:29.850
but there are no take points
clearly labeled, you know,

00:21:29.850 --> 00:21:32.810
we're going to assume
that the penetration

00:21:32.810 --> 00:21:37.020
and terminus are take
points, and if those trigger

00:21:37.020 --> 00:21:39.190
an exception, then you're
going to have to come back in

00:21:39.190 --> 00:21:41.559
and resolve that, or provide us a plat

00:21:41.559 --> 00:21:44.420
that clearly shows where
those take points are.

00:21:44.420 --> 00:21:47.780
So again make sure that
information is on the plat.

00:21:47.780 --> 00:21:52.360
And that those perpendicular
calls are on the plat, again,

00:21:52.360 --> 00:21:54.340
a lot of times what we're getting

00:21:55.239 --> 00:21:59.440
are angles coming at
something other than 90 degrees.

00:21:59.440 --> 00:22:03.143
And again, per rule five,
they need to be perpendicular.

00:22:05.510 --> 00:22:07.610
Another thing we're
looking at, especially

00:22:08.485 --> 00:22:11.110
when we're looking at
pooled units, that the tracts,

00:22:11.110 --> 00:22:15.070
the acreage that you're
associated to that tract on the plat

00:22:15.070 --> 00:22:19.440
doesn't match the associated
forms that are being supplied

00:22:19.440 --> 00:22:21.620
with the application, so
in this case, the form P12.

00:22:21.620 --> 00:22:23.660
Or it could be vice versa,

00:22:23.660 --> 00:22:27.260
the tract could state that
tract A has a hundred acres,

00:22:27.260 --> 00:22:31.320
but the label on the
plat says 98, you know.

00:22:31.320 --> 00:22:33.550
Everything has to match up.

00:22:33.550 --> 00:22:37.340
And also that the identifiers
match up, it doesn't help us

00:22:37.340 --> 00:22:42.340
if on the plat, we see
tract 1, 2, 3, 4, 5, and then

00:22:42.650 --> 00:22:46.340
you fill out the P12 stating
tracts A, B, C, D, and E.

00:22:47.549 --> 00:22:49.910
Okay, well, which one's A?
We don't know, you know.

00:22:49.910 --> 00:22:51.123
And if you know,

00:22:51.970 --> 00:22:55.050
there's acreges needed
that don't match up either,

00:22:55.050 --> 00:22:58.180
then it's even doubly hard to
figure out what's going where.

00:22:58.180 --> 00:23:01.530
So make sure that if
you are in a pooled unit

00:23:01.530 --> 00:23:04.090
that you're using consistent labeling

00:23:04.090 --> 00:23:05.843
on both the form and the plat.

00:23:09.469 --> 00:23:10.860
But again, as I said earlier,

00:23:10.860 --> 00:23:14.340
we want to make sure
that the current information

00:23:15.599 --> 00:23:18.480
for the applicant is listed on the plat.

00:23:18.480 --> 00:23:21.510
We want to make sure
that the current lease name

00:23:21.510 --> 00:23:24.710
is on the plat, where
we see this as, you know,

00:23:24.710 --> 00:23:28.689
we could be recompleting
a well for field A into field B,

00:23:28.689 --> 00:23:31.140
I may have an established lease name

00:23:31.140 --> 00:23:33.610
in field A and a different lease name

00:23:33.610 --> 00:23:37.410
and field B, but I'm using
my original plat, which is fine.,

00:23:37.410 --> 00:23:40.840
you can do that, but again,
you're not in field A anymore,

00:23:40.840 --> 00:23:43.160
you're attempting to
get a permit for field B.

00:23:43.160 --> 00:23:46.390
So we need to make sure
that the information associated

00:23:46.390 --> 00:23:49.167
that field is correct so that
would mean new lease name

00:23:49.167 --> 00:23:51.340
and a potential new well number

00:23:51.340 --> 00:23:53.833
so making sure that all that matches up.

00:23:55.040 --> 00:23:58.260
Make sure that the
acreage identified on the plat

00:23:59.240 --> 00:24:02.930
is supported by what you're
filing, and again, you know,

00:24:02.930 --> 00:24:06.340
we're seeing tracts that have one thing,

00:24:06.340 --> 00:24:08.840
the form P12 says something different.

00:24:08.840 --> 00:24:12.010
The four P16 we're
looking at the total acreage

00:24:12.010 --> 00:24:15.170
has something different
that's on the plat, so again,

00:24:15.170 --> 00:24:18.450
these are all supposed to
be a mirror of each other.

00:24:18.450 --> 00:24:20.780
The information on one, if it's captured

00:24:20.780 --> 00:24:23.630
on another form, it should
be the same, all right?

00:24:23.630 --> 00:24:25.863
So make sure that all that matches up.

00:24:26.830 --> 00:24:27.940
And then again,

00:24:27.940 --> 00:24:31.660
making sure that the
coordinates are all represented

00:24:31.660 --> 00:24:34.840
for the surface location
at a minimum on the plat.

00:24:34.840 --> 00:24:37.180
And this is problematic
for folks who are trying

00:24:37.180 --> 00:24:39.740
to reuse older plats
from their will files

00:24:41.217 --> 00:24:44.250
because typically, you know,
GPS coordinates weren't common

00:24:45.279 --> 00:24:46.497
until the late '80s, early '90s,

00:24:46.497 --> 00:24:48.330
and so if you're using plats prior

00:24:48.330 --> 00:24:51.210
to that, they're probably
not going to be on there.

00:24:51.210 --> 00:24:53.270
And so you're going to have
to make sure that you supply

00:24:53.270 --> 00:24:55.833
that information when you
submit and use that plat.

00:24:57.800 --> 00:25:00.070
When we're talking
about rule 37, you know,

00:25:00.070 --> 00:25:02.870
we'd want to make sure the
distance to that leased line,

00:25:03.829 --> 00:25:06.240
that you're using the correct distances.

00:25:06.240 --> 00:25:09.380
And if we're talking about pooled units,

00:25:09.380 --> 00:25:13.270
or if you're using a
pulled unit for a PSA

00:25:13.270 --> 00:25:16.330
or allocation well application,

00:25:16.330 --> 00:25:19.410
and there are unleased
interests in one of those internal

00:25:19.410 --> 00:25:23.200
tracts that you're providing
the distance to those.

00:25:23.200 --> 00:25:26.210
Because those could be
triggering a rule exception as well,

00:25:26.210 --> 00:25:30.170
and also could affect when
we're looking at notification.

00:25:30.170 --> 00:25:31.210
So we want to make sure

00:25:31.210 --> 00:25:34.594
that you've clearly identified those.

00:25:34.594 --> 00:25:37.330
Make sure that you're
providing the distance

00:25:37.330 --> 00:25:38.853
to the nearest well,

00:25:40.160 --> 00:25:42.870
and this specifically for the wells

00:25:42.870 --> 00:25:44.840
that are in the fields
you're applying for.

00:25:44.840 --> 00:25:48.550
So what we'll see a lot
of times is I permit a well

00:25:48.550 --> 00:25:51.449
in field B there's a
well that's in field A

00:25:51.449 --> 00:25:55.060
that's 200 feet away, and
that's the distance we're given.

00:25:55.060 --> 00:25:58.546
But in reality the next nearest well

00:25:58.546 --> 00:26:01.820
in the field I'm applying
for is 400 feet away,

00:26:01.820 --> 00:26:05.120
so it may not mean much,

00:26:05.120 --> 00:26:07.020
but it could trigger an
exception, and again,

00:26:07.020 --> 00:26:09.010
that could require you to give us money

00:26:09.010 --> 00:26:11.600
that you wouldn't have to, so again,

00:26:11.600 --> 00:26:13.890
it's important to make
sure that you're using

00:26:15.249 --> 00:26:16.980
the appropriate distances to the wells

00:26:16.980 --> 00:26:19.493
that are in the field
that you're applying for.

00:26:21.010 --> 00:26:25.030
And then once again,
if a trigger is flipped

00:26:25.030 --> 00:26:27.640
and you need an exception,

00:26:27.640 --> 00:26:30.300
making sure that
you're clearly identifying

00:26:30.300 --> 00:26:32.157
who those affected parties are.

00:26:32.157 --> 00:26:34.720
And we get a lot of times
we'll focus mostly on my own

00:26:34.720 --> 00:26:37.390
offset, well, the plat
doesn't state that, you know,

00:26:37.390 --> 00:26:39.130
you need to visually show that

00:26:39.130 --> 00:26:43.040
on the plat, if that is the
resolution you are seeking

00:26:44.419 --> 00:26:47.700
to get and use to get that exception.

00:26:47.700 --> 00:26:50.900
So you, it doesn't matter if it's you,

00:26:50.900 --> 00:26:53.030
you still need to make
sure you clearly label

00:26:53.030 --> 00:26:54.663
your information on that plat.

00:26:58.700 --> 00:27:01.530
All right so let's talk
about notification

00:27:01.530 --> 00:27:04.320
and David covered some of this as well.

00:27:04.320 --> 00:27:08.340
And what we're going to
talk about is, are the notices

00:27:08.340 --> 00:27:13.340
that we will send out in
support of the permit application

00:27:13.680 --> 00:27:17.440
and those that you are
responsible for sending out.

00:27:17.440 --> 00:27:22.010
So we will send out the
notification for exception

00:27:22.010 --> 00:27:24.213
for Statewide rule 37 or 38.

00:27:25.414 --> 00:27:27.860
So those are the, you
supply us that service list.

00:27:27.860 --> 00:27:30.560
We're going to generate
that notice and get those out.

00:27:32.110 --> 00:27:36.680
If we don't, if we do
receive a notice back

00:27:36.680 --> 00:27:39.590
then, we're going to also
send out supplemental notice

00:27:39.590 --> 00:27:43.893
if you're able to give us a
new and updated address.

00:27:45.010 --> 00:27:46.630
What you're responsible for

00:27:48.514 --> 00:27:51.017
is for off-lease
Penetration Point issues.

00:27:52.470 --> 00:27:54.920
So if you're attempting to permit a well

00:27:54.920 --> 00:27:56.950
with an off-lease Penetration Point,

00:27:56.950 --> 00:28:00.370
you will have to identify
the affected party.

00:28:00.370 --> 00:28:02.870
There's that word again, affected party.

00:28:02.870 --> 00:28:06.410
And then you will be
required to send them a notice

00:28:06.410 --> 00:28:11.410
that gives them 21 days
to evaluate your request.

00:28:12.180 --> 00:28:16.239
And if after 21 days,
they have not responded

00:28:16.239 --> 00:28:19.170
to you, then you can
submit the application,

00:28:19.170 --> 00:28:23.090
and we could potentially
approve that permit with

00:28:23.090 --> 00:28:27.620
that notice being sent out
and no protest being received.

00:28:27.620 --> 00:28:30.810
The importance of you
waiting is if they do protest,

00:28:30.810 --> 00:28:33.300
then you get to work it out and you get

00:28:33.300 --> 00:28:36.020
to figure out what you're
going to be able to do.

00:28:36.020 --> 00:28:37.810
And then you can send an application

00:28:37.810 --> 00:28:40.180
that we can then work on.

00:28:40.180 --> 00:28:43.230
What we don't want to have
happen is you submit something,

00:28:43.230 --> 00:28:47.510
and then the application completely
changes because you have

00:28:47.510 --> 00:28:49.340
to come to some sort
of different agreement

00:28:49.340 --> 00:28:53.440
with an affected party in
order to resolve a protest.

00:28:53.440 --> 00:28:56.650
So we want to make sure
all that is done beforehand

00:28:56.650 --> 00:28:59.050
before that application is submitted,

00:28:59.050 --> 00:29:01.923
that way we can just
process that permit.

00:29:03.280 --> 00:29:05.750
And then you do have the
option if you cannot come

00:29:05.750 --> 00:29:08.090
to some sort of agreement
to request a hearing.

00:29:08.090 --> 00:29:10.803
So that's how that could be resolved.

00:29:12.526 --> 00:29:14.034
And then a rule 40.

00:29:14.034 --> 00:29:16.520
So if you're attempting to get
an amended or administrative,

00:29:16.520 --> 00:29:19.590
I should say approval
for a Statewide rule 40

00:29:20.780 --> 00:29:24.850
double sign of acreage
because of depth severances

00:29:24.850 --> 00:29:27.950
with any tract, then
you would be required.

00:29:27.950 --> 00:29:31.520
to send that notice
out, but in this case,

00:29:31.520 --> 00:29:34.270
you're not required to
wait for any length of time

00:29:34.270 --> 00:29:35.860
after you send the notice.

00:29:35.860 --> 00:29:37.260
But what you do have to do

00:29:37.260 --> 00:29:40.173
is make sure you send
that notice out 15 days,

00:29:41.350 --> 00:29:44.320
no more than 15 days before
you submit the application.

00:29:44.320 --> 00:29:46.690
So you can't send that notice out today

00:29:46.690 --> 00:29:49.090
and then wait six
months to file your permit,

00:29:49.090 --> 00:29:50.790
then that wouldn't work.

00:29:50.790 --> 00:29:52.670
But you could send them out today

00:29:52.670 --> 00:29:54.180
and submit your permit today,

00:29:54.180 --> 00:29:57.130
and then you would be meeting
the requirements of the rule.

00:30:00.630 --> 00:30:04.810
All right, so we have our
resolutions to some exceptions.

00:30:04.810 --> 00:30:09.210
Okay, so again, clearly
identifying on the certified plat.

00:30:09.210 --> 00:30:12.800
So that's an important
word right there, certified plat,

00:30:12.800 --> 00:30:14.610
all affected parties.

00:30:14.610 --> 00:30:17.120
And what that means is it's either

00:30:17.120 --> 00:30:19.800
the certification is from your surveyor,

00:30:19.800 --> 00:30:21.592
who hasa prepared your plat

00:30:21.592 --> 00:30:23.760
and then put in all the
permanent information.

00:30:23.760 --> 00:30:27.140
Or it's a representative of
the company who has added

00:30:27.140 --> 00:30:30.970
that information on and
is attesting to its accuracy

00:30:30.970 --> 00:30:33.853
by putting your signature on that plat.

00:30:35.830 --> 00:30:40.830
Once you have run a publication
on your exception requests,

00:30:41.480 --> 00:30:44.130
then you need to make
sure that you get that into us.

00:30:45.760 --> 00:30:49.677
We run those and we
get them and rate up to

00:30:49.677 --> 00:30:53.190
approve those guys, and we
haven't received your affidavit.

00:30:53.190 --> 00:30:55.660
So they're just going
to sit there until we get it.

00:30:55.660 --> 00:30:59.390
And so we'll send you a
problem letter to request those.

00:30:59.390 --> 00:31:02.800
So as soon as you get them
forward them to us, even though

00:31:02.800 --> 00:31:06.490
if the application is not
ready to be approved yet

00:31:06.490 --> 00:31:09.030
the quicker, you get them
to us, we get them attached.

00:31:09.030 --> 00:31:12.240
And then as soon as we're
able to approve them, we can,

00:31:12.240 --> 00:31:14.670
as long as there are no protests.

00:31:14.670 --> 00:31:19.090
And then the big issue that we see here,

00:31:19.090 --> 00:31:22.853
especially with the types
of applications that we see,

00:31:27.730 --> 00:31:31.220
folks are having to publish
a lot of these notices.

00:31:31.220 --> 00:31:36.220
And so we are seeing a
higher number than usual issues

00:31:37.630 --> 00:31:42.630
in which applicants are
failing to run the publication

00:31:43.120 --> 00:31:48.120
in the appropriate
timeframe or that the notices

00:31:49.610 --> 00:31:53.850
are being run consecutively,
so they'll run it one week,

00:31:53.850 --> 00:31:56.890
a week is skipped, and
then they'll run it again.

00:31:56.890 --> 00:32:00.900
So we need to make
sure that you're working

00:32:00.900 --> 00:32:04.010
with your newspapers and explain to them

00:32:04.010 --> 00:32:06.690
that it needs to be consecutive.

00:32:06.690 --> 00:32:09.870
That that first data publication must be

00:32:09.870 --> 00:32:13.633
within seven days of the issuance date.

00:32:14.620 --> 00:32:17.653
And that's important
because that's in the rule,

00:32:18.670 --> 00:32:23.670
that is under Statewide
will one those requirements.

00:32:24.077 --> 00:32:26.520
And so those are very
important during the instruction.

00:32:26.520 --> 00:32:29.280
Then it's explained to
you what you need to do

00:32:29.280 --> 00:32:30.793
if you do miss the date.

00:32:33.579 --> 00:32:35.470
An easy thing to
do, that'll help us out,

00:32:35.470 --> 00:32:38.210
and hopefully help you
out is if you know the days

00:32:38.210 --> 00:32:41.230
of the week that the
newspaper you're using

00:32:41.230 --> 00:32:44.090
accepts the information from you

00:32:44.090 --> 00:32:47.100
and when the information
will be published,

00:32:47.100 --> 00:32:50.110
because then we can
set the issuance date

00:32:50.110 --> 00:32:53.370
to help you meet that timeframe.

00:32:53.370 --> 00:32:56.440
If we don't know that we're
going to issue it for tomorrow,

00:32:56.440 --> 00:32:59.300
and if you can get in
for a week and a half

00:32:59.300 --> 00:33:00.780
well, then you know,

00:33:00.780 --> 00:33:04.250
that means if you don't
contact us to get it redone,

00:33:04.250 --> 00:33:07.010
you're going to have to
spend another 2,500 bucks

00:33:07.010 --> 00:33:10.390
to rerun it correctly,
so it it's, you know,

00:33:10.390 --> 00:33:14.530
communication is what's
going to work with this aspect

00:33:14.530 --> 00:33:18.350
of the publications,
give us that information,

00:33:18.350 --> 00:33:21.200
and we can help you out
by setting up those notices

00:33:21.200 --> 00:33:24.016
so that you can meet the requirements

00:33:24.016 --> 00:33:25.443
that the papers are placing on you.

00:33:26.630 --> 00:33:30.970
And when you do submit
information like affidavits

00:33:30.970 --> 00:33:33.120
of publication or anything like that,

00:33:33.120 --> 00:33:35.950
and make sure that you
put in the subject line,

00:33:35.950 --> 00:33:38.430
the status number of the application,

00:33:38.430 --> 00:33:40.460
sometimes we'll just
get stuff sent into us,

00:33:40.460 --> 00:33:45.460
and it's not clear as to
what this affidavit is going to,

00:33:46.931 --> 00:33:51.410
make sure you send it to
the correct email address.

00:33:51.410 --> 00:33:54.460
Anything that's related to
a Statewide rule exception

00:33:54.460 --> 00:33:58.420
should be being sent
to that Statewide rule 37

00:33:58.420 --> 00:34:01.740
email address that
you'll see on the notice

00:34:01.740 --> 00:34:04.130
or on the publication instructions

00:34:04.130 --> 00:34:05.493
and make sure all of that
information goes there,

00:34:05.493 --> 00:34:08.173
because if you send
it to the problem W1,

00:34:09.240 --> 00:34:10.103
well, the person who's working

00:34:10.103 --> 00:34:12.470
in the sections, isn't
going to go looking

00:34:12.470 --> 00:34:15.597
for those there, because
those aren't problems, right.

00:34:15.597 --> 00:34:17.800
He's looking for information coming in

00:34:17.800 --> 00:34:21.221
to that specific email
box to help him resolve

00:34:21.221 --> 00:34:24.253
the application he's been working on.

00:34:26.310 --> 00:34:27.300
Okay.

00:34:27.300 --> 00:34:31.070
So does anyone have any
questions concerning that?

00:34:31.070 --> 00:34:35.930
Or is there stuff that you
David and Aaron wanted

00:34:35.930 --> 00:34:38.773
to discuss that you haven't
been able to answer?

00:34:40.540 --> 00:34:42.560
<v Attendee>We are clear for now.</v>

00:34:42.560 --> 00:34:46.020
<v ->Okay, well then we'll
get to the next section.</v>

00:34:46.020 --> 00:34:48.280
We're going to start
talking specifically

00:34:48.280 --> 00:34:51.963
about rule 37 and 38 exceptions.

00:34:53.160 --> 00:34:56.390
I'm going to talk about
what are some triggers

00:34:56.390 --> 00:35:00.600
that create one of these exceptions.

00:35:00.600 --> 00:35:03.640
We're going to talk about
Non-Perforation Zones

00:35:03.640 --> 00:35:05.800
and how they can be used to stop

00:35:05.800 --> 00:35:07.900
that trigger from happening.

00:35:07.900 --> 00:35:09.400
We're going to go through,

00:35:09.400 --> 00:35:12.670
go over some of the
exception checks, and again,

00:35:12.670 --> 00:35:14.950
this is some information
that David showed you earlier,

00:35:14.950 --> 00:35:19.140
but again, we'll reemphasize
some of this information.

00:35:19.140 --> 00:35:20.640
Plat requirements, and again,

00:35:20.640 --> 00:35:21.963
we'll go a touch a little bit more.

00:35:21.963 --> 00:35:24.249
I won't go as in-depth into that

00:35:24.249 --> 00:35:27.600
'cause we've kind of covered
a bunch of that information

00:35:27.600 --> 00:35:30.290
here in the first part
of the presentation.

00:35:30.290 --> 00:35:32.580
We'll go through some
more of the resolutions

00:35:32.580 --> 00:35:36.954
and talk about notification
and how you figure out

00:35:36.954 --> 00:35:40.660
where you need to look
for an effective party.

00:35:40.660 --> 00:35:41.820
And then we'll talk a little bit more

00:35:41.820 --> 00:35:45.053
by about, in a way
publication requirements.

00:35:46.040 --> 00:35:51.040
So what doesn't
trigger a rule exception?

00:35:53.010 --> 00:35:56.680
There are a lot of times
that we get folks who will flag

00:35:56.680 --> 00:36:00.900
their application with an
exception when it is required.

00:36:00.900 --> 00:36:03.970
And they're doing that
because a Penetration Point

00:36:03.970 --> 00:36:06.980
may be too close to a lease line.

00:36:06.980 --> 00:36:11.133
Remember if you've
clearly identified a take point,

00:36:12.100 --> 00:36:13.930
a first take point,

00:36:13.930 --> 00:36:17.470
then that's the part of the
well where we're beginning our

00:36:17.470 --> 00:36:21.100
checks for rule 37 on
not the Penetration Point.

00:36:21.100 --> 00:36:25.160
So make sure if you they're
both one and the same,

00:36:25.160 --> 00:36:26.940
then they should both
should be clearly labeled.

00:36:26.940 --> 00:36:29.080
And it's really the
lat, the first take point,

00:36:29.080 --> 00:36:31.490
which is also the Penetration Point

00:36:31.490 --> 00:36:33.140
that is triggering the exception.

00:36:34.420 --> 00:36:36.930
Just because you have an
off-lease Penetration Point

00:36:36.930 --> 00:36:39.910
does not mean you need
a rule exception, okay.

00:36:39.910 --> 00:36:41.670
So we see that as well,

00:36:41.670 --> 00:36:45.670
where folks are filing for an
off-lease Penetration Point

00:36:45.670 --> 00:36:49.760
and then checking that
the rule 37 is required

00:36:49.760 --> 00:36:52.898
and the well is completely illegal

00:36:52.898 --> 00:36:56.583
to all the line that would not
really require an exception,

00:36:57.856 --> 00:37:00.300
and again, back to what
David spoke about earlier,

00:37:00.300 --> 00:37:02.800
there are no refunds, and
so that would be money

00:37:02.800 --> 00:37:05.963
that is going to go away
and not be seen again.

00:37:07.660 --> 00:37:11.213
Off-lease surface locations
don't trigger a rule exception,

00:37:13.230 --> 00:37:17.923
and then if you're using
Non-Perforation Zones correctly,

00:37:18.960 --> 00:37:23.230
then those could also keep a
rule 37 from being triggered.

00:37:23.230 --> 00:37:25.820
And we're going to see some examples of

00:37:25.820 --> 00:37:29.523
how and when to use a
Non-Perforation Zones here shortly.

00:37:32.650 --> 00:37:37.650
All right, so what does
trigger an exception?

00:37:37.960 --> 00:37:42.924
So if my productive portion of my well

00:37:42.924 --> 00:37:45.980
is too close to an exterior lease line,

00:37:45.980 --> 00:37:49.650
if it's a vertical well, is
where that surface location is.

00:37:49.650 --> 00:37:51.760
If it's a directional well,

00:37:51.760 --> 00:37:54.250
it's where that bottom
hole is in relationship

00:37:54.250 --> 00:37:57.990
to an exterior lease line
or to an interior tract line

00:37:57.990 --> 00:37:59.303
if I have a pooled unit.

00:38:01.540 --> 00:38:06.540
It could also be how
close I am to another well,

00:38:06.630 --> 00:38:10.240
'cause we've got to remember
there are two different aspects

00:38:10.240 --> 00:38:14.400
of rule 37, there's the
lease spacing aspect

00:38:14.400 --> 00:38:16.643
and then between well spacing aspects,

00:38:17.628 --> 00:38:21.467
so my well could be too
close to another producing well

00:38:23.136 --> 00:38:25.270
in the field, on my lease,

00:38:25.270 --> 00:38:27.293
and that's gonna trigger and exception.

00:38:28.530 --> 00:38:29.363
And again,

00:38:29.363 --> 00:38:32.180
as I mentioned that if I
have an interior tract line,

00:38:32.180 --> 00:38:36.490
my horizontal well, any
within drain hole where I,

00:38:36.490 --> 00:38:39.580
where I had my first and
last take point is too close

00:38:39.580 --> 00:38:41.350
to an into your tract line.

00:38:41.350 --> 00:38:43.770
That bottom hole for
directional well is too close

00:38:43.770 --> 00:38:45.140
to interior tract line could be

00:38:45.140 --> 00:38:48.053
what's triggering an
exception for rule 37.

00:38:53.260 --> 00:38:58.260
Okay, so here's a basic
straightforward example

00:38:58.770 --> 00:39:03.770
of how to use an NPZ when
I'm trying to isolate one tract

00:39:03.851 --> 00:39:07.869
that has an unleased
mineral interest in it.

00:39:07.869 --> 00:39:12.869
So one thing you
remember is that your NPZ

00:39:13.850 --> 00:39:16.950
are always going to be in the tract

00:39:16.950 --> 00:39:19.610
that you have a hundred
percent of the interest in.

00:39:19.610 --> 00:39:23.500
It's not in the tract where
the unleased interests are.

00:39:23.500 --> 00:39:24.510
Okay?

00:39:24.510 --> 00:39:28.230
And that's because what's
triggering the exception

00:39:28.230 --> 00:39:32.010
would be a take point
that's less than the field rules

00:39:32.010 --> 00:39:34.670
allow me to be to a lease line

00:39:34.670 --> 00:39:37.240
or a tract with unleased interest.

00:39:37.240 --> 00:39:41.760
So for instance, we'll
say this is a Wild Cat Well.

00:39:43.740 --> 00:39:48.740
So in Wild Cat, you need to
be 467 feet from a lease line

00:39:49.570 --> 00:39:51.840
or an interior tract line.

00:39:51.840 --> 00:39:56.840
So this NPZ down here
needs to be 467 feet long,

00:39:57.900 --> 00:40:01.570
and this one has to be 467 feet long.

00:40:01.570 --> 00:40:04.640
Once I'm 468 feet away from that line,

00:40:04.640 --> 00:40:06.730
I can begin perforating that well again,

00:40:06.730 --> 00:40:11.060
because now I'm at a
legal distance from this tract

00:40:12.320 --> 00:40:15.420
If this was the Eagleford,

00:40:15.420 --> 00:40:17.380
this would then be a hundred feet

00:40:17.380 --> 00:40:21.140
'cause I'm going on the
long axis of the wellbore.

00:40:21.140 --> 00:40:22.253
If I were to stop,

00:40:22.253 --> 00:40:26.430
then I need to be 100 feet
away from an impacted tract.

00:40:26.430 --> 00:40:29.770
And so this NPZ would
be a hundred feet here.

00:40:29.770 --> 00:40:32.170
And then this one would
be a hundred feet there.

00:40:34.760 --> 00:40:37.099
Now we're going to throw
a little complication into this,

00:40:37.099 --> 00:40:39.310
and we have multiple tracts.

00:40:39.310 --> 00:40:41.690
And again you'll notice my NPZs

00:40:41.690 --> 00:40:44.820
are in the tracts where I don't, right,

00:40:44.820 --> 00:40:46.970
where I have a hundred
percent of the interest under lease

00:40:46.970 --> 00:40:50.050
because I am protecting
the collective rights

00:40:50.050 --> 00:40:53.140
of those folks who aren't under lease.

00:40:53.140 --> 00:40:55.250
So again, if this was the Eagleford,

00:40:55.250 --> 00:40:57.377
I have a hundred foot take point there,

00:40:57.377 --> 00:40:59.340
a hundred foot take point there,

00:40:59.340 --> 00:41:01.030
and a hundred foot take point there.

00:41:01.030 --> 00:41:04.860
And that would keep a
rule 37 from being triggered

00:41:06.189 --> 00:41:08.553
to those tracts with unleased interests.

00:41:12.050 --> 00:41:16.400
So now we get a little more complicated.

00:41:16.400 --> 00:41:19.950
I'm not going through a tract
that has unleased interests,

00:41:19.950 --> 00:41:24.950
but I'm running parallel to a
tract with unleased interests.

00:41:25.070 --> 00:41:28.633
And again, this example
will be under Wild Cat.

00:41:29.930 --> 00:41:31.300
And so Wild Cat, again,

00:41:31.300 --> 00:41:36.300
I need to be 460 feet
from that tract line.

00:41:36.810 --> 00:41:41.110
So this distance,
because I'm less than 467,

00:41:41.110 --> 00:41:46.110
I need to show my NPZ
covers this tract line here.

00:41:47.230 --> 00:41:50.950
But then I also have to be 467

00:41:52.770 --> 00:41:56.380
or up to 467 feet away past

00:41:56.380 --> 00:41:58.698
because now I've got to make sure

00:41:58.698 --> 00:42:02.120
from here to here, that it's 467 feet,

00:42:02.120 --> 00:42:04.303
and the same down here.

00:42:05.150 --> 00:42:07.860
So it's going to extend further because

00:42:09.127 --> 00:42:13.680
this field doesn't have special
rules for horizontal wells.

00:42:13.680 --> 00:42:17.590
And the next example we do,

00:42:17.590 --> 00:42:19.240
so this could be the spray barrier.

00:42:19.240 --> 00:42:21.411
This could be the Eagle bird,

00:42:21.411 --> 00:42:23.370
this could be a Phantom Wolf Camp

00:42:23.370 --> 00:42:28.370
where I have a hundred foot
axial heel and toe distance

00:42:29.880 --> 00:42:32.013
plus a perpendicular distance.

00:42:33.470 --> 00:42:36.330
But again, there's
a little caveat to this.

00:42:36.330 --> 00:42:39.743
So in this particular example,

00:42:40.600 --> 00:42:43.350
and we're gonna say
we're in the Spraberry Trend,

00:42:43.350 --> 00:42:47.083
so we're looking at 100
foot and 330 foot spacing.

00:42:48.300 --> 00:42:53.300
My wellbore is more
than 100 feet from this line.

00:42:56.170 --> 00:42:58.917
Therefore, all I need to show

00:42:58.917 --> 00:43:02.730
for my Non-Perforation Zone is wherever

00:43:02.730 --> 00:43:06.300
that if I were to take a
perpendicular distance

00:43:06.300 --> 00:43:09.030
from this wellbore, I
would hit that tract line.

00:43:09.030 --> 00:43:13.723
So you can see my
NPZ mirrors that tract.

00:43:14.650 --> 00:43:19.059
Okay, and that's
because I'm over 100 feet,

00:43:19.059 --> 00:43:22.683
but less than 330 to that tract line.

00:43:23.650 --> 00:43:28.650
And this next example, I'm
less than 100 feet to this line,

00:43:30.180 --> 00:43:33.500
so now I had to
incorporate my heel and toe,

00:43:33.500 --> 00:43:35.530
'cause again, if I had to stop,

00:43:35.530 --> 00:43:38.950
we're looking at 100
feet around that point.

00:43:38.950 --> 00:43:42.853
And if that point
were to touch this line,

00:43:42.853 --> 00:43:45.010
then it would trigger an exception,

00:43:45.010 --> 00:43:48.940
so now you have to extend
that Non-Perforation Zone

00:43:48.940 --> 00:43:53.940
further up, up to where you
wouldn't be hitting that line

00:43:54.140 --> 00:43:57.133
if you were to draw that 100
foot radius around the well.

00:43:58.120 --> 00:44:00.610
So that's an important thing to remember

00:44:02.596 --> 00:44:04.910
that it's not only the
perpendicular distance,

00:44:04.910 --> 00:44:07.810
but the axial distance as
well here that comes into play

00:44:07.810 --> 00:44:12.810
because of how close my
well is to that unleased tract.

00:44:18.250 --> 00:44:19.770
Here, we're not in a perfect square,

00:44:19.770 --> 00:44:23.810
so this kind of throws
a kink in the works here.

00:44:23.810 --> 00:44:27.420
So down here, we're looking good.

00:44:27.420 --> 00:44:31.300
We're going to say we're
talking about Wild Cat for instance

00:44:31.300 --> 00:44:35.030
so here's my 467 foot NPZ zone

00:44:37.330 --> 00:44:39.470
showing that I'm regular

00:44:40.370 --> 00:44:43.890
from this part of the well
to the unleased interests.

00:44:43.890 --> 00:44:48.500
And I'm thinking great, all I
need is 467 feet on this side,

00:44:48.500 --> 00:44:53.010
but we have to remember
look at this line here.

00:44:53.010 --> 00:44:56.813
Is this distance 467 feet away?

00:44:57.940 --> 00:45:02.320
If it isn't, then this is going
to have to extend further up

00:45:02.320 --> 00:45:06.470
until you're 467 feet from this line,

00:45:06.470 --> 00:45:09.950
so again, it's important
to look at your plat,

00:45:09.950 --> 00:45:13.250
look at those tracts that
have these unleased interests

00:45:13.250 --> 00:45:16.850
to make sure that the
NPZ zone you're using

00:45:16.850 --> 00:45:21.440
is truly keeping that rule 37
from being triggered, okay.

00:45:21.440 --> 00:45:24.410
Cause if you were to file this
and then we're going to say,

00:45:24.410 --> 00:45:25.820
you still need a rule 37

00:45:25.820 --> 00:45:29.440
because you're
failing this part up here.

00:45:29.440 --> 00:45:32.140
So you would then need
to send in a revised plat

00:45:32.140 --> 00:45:36.863
extending that Non-Perforation
Zone in order to be regular.

00:45:40.060 --> 00:45:42.490
So here's another one
that's weird, you know,

00:45:42.490 --> 00:45:46.759
we're going from one tract at a angle

00:45:46.759 --> 00:45:49.259
and ito another tract that
has unleased interests.

00:45:50.629 --> 00:45:54.520
So again, we're looking
perpendicular to this

00:45:54.520 --> 00:45:57.400
from this well to this line,

00:45:57.400 --> 00:46:00.003
so if this were Spraberry Trend,

00:46:01.819 --> 00:46:05.777
wherever I can have a point
that's 331 feet to that line,

00:46:05.777 --> 00:46:08.610
then everything below
that should be covered

00:46:08.610 --> 00:46:10.730
by a Non-Perforation Zone

00:46:10.730 --> 00:46:13.993
to keep that exception
from being triggered.

00:46:18.810 --> 00:46:20.310
All right.

00:46:20.310 --> 00:46:24.539
So David, you said there
was a question that came in?

00:46:24.539 --> 00:46:26.483
What exactly was the question?

00:46:27.689 --> 00:46:32.430
<v David>If you elaborate
on the take points</v>

00:46:33.371 --> 00:46:38.330
and everywhere in between
being assessed for rule 37 spaces?

00:46:38.330 --> 00:46:42.610
<v ->Yeah, that should
be covered here</v>

00:46:42.610 --> 00:46:46.140
in the next few slides,
if you can reach out

00:46:46.140 --> 00:46:49.380
to that person, once I get
through this next portion,

00:46:49.380 --> 00:46:51.010
if they still have a question,

00:46:51.010 --> 00:46:53.710
then we can cover that
when we're done with this part.

00:46:55.400 --> 00:46:58.480
So here, we're going
into the different profiles

00:46:58.480 --> 00:47:00.410
of the wells and how we're looking

00:47:00.410 --> 00:47:03.053
at assessing for a rule 37.

00:47:04.440 --> 00:47:08.649
So under rule 37 to figure out

00:47:08.649 --> 00:47:11.470
who an affected party is,

00:47:11.470 --> 00:47:15.970
you need to understand
where to look for them.

00:47:15.970 --> 00:47:21.190
So under rule 37, it
states that offsets with

00:47:21.190 --> 00:47:24.030
within the greater of
the lease line distance

00:47:24.030 --> 00:47:27.270
or one half of the between well distance

00:47:27.270 --> 00:47:28.763
is an affected party.

00:47:29.830 --> 00:47:32.810
So that changes a little
bit when we have fields

00:47:32.810 --> 00:47:35.040
with special horizontal rules,

00:47:35.040 --> 00:47:37.840
because many of those
fields don't have any

00:47:37.840 --> 00:47:39.450
between well spacing,

00:47:39.450 --> 00:47:42.740
and then they even have
special take point language

00:47:42.740 --> 00:47:46.990
within them, so that could
change how you look at

00:47:46.990 --> 00:47:49.470
and determine who's an affected party.

00:47:49.470 --> 00:47:53.430
So in some of the examples
that we'll be looking at

00:47:54.850 --> 00:47:56.550
should help me cover that up.

00:47:56.550 --> 00:47:59.080
And then if we're talking
about the vertical well,

00:47:59.080 --> 00:48:02.450
that you were applying for
that trigger an exception and

00:48:02.450 --> 00:48:05.140
like in the Spraberry, there
is no between well exception,

00:48:05.140 --> 00:48:07.600
then it's going to be whatever
the lease line distances.

00:48:07.600 --> 00:48:09.130
So it would be anybody

00:48:09.130 --> 00:48:12.443
within 330 feet of
that well, for instance.

00:48:14.160 --> 00:48:17.900
So as David showed
earlier that the information

00:48:17.900 --> 00:48:22.140
that we're gathering in the
box that's being identified here

00:48:22.140 --> 00:48:25.600
is what the system is
evaluating for a vertical well.

00:48:25.600 --> 00:48:29.120
So that distance there
needs to be greater

00:48:29.120 --> 00:48:31.940
than whatever the
minimum distance required

00:48:31.940 --> 00:48:34.100
by the field or fields
you're applying for.

00:48:34.100 --> 00:48:37.430
So you could have 20
fields that you're applying for,

00:48:37.430 --> 00:48:39.750
and only exception in one,

00:48:39.750 --> 00:48:41.650
or you may need an exception in all 20

00:48:42.570 --> 00:48:45.680
based on the field rules that are set up

00:48:45.680 --> 00:48:47.860
for that particular field.

00:48:47.860 --> 00:48:50.383
And so if you were to
trigger that exception,

00:48:50.383 --> 00:48:52.380
this is what it would look like.

00:48:52.380 --> 00:48:57.020
So we're going to say
that this is a Wild Cat.

00:48:57.020 --> 00:49:00.950
And so half of the between well distance

00:49:00.950 --> 00:49:04.200
for Wild Cat is 600 feet,

00:49:04.200 --> 00:49:06.973
'cause it's under Statewide
rules and that's 1200 foot

00:49:06.973 --> 00:49:10.380
between well distance,
so half of that is 600.

00:49:10.380 --> 00:49:13.060
The lease line space is 467.

00:49:13.060 --> 00:49:17.370
So the greater of those
two values is 600 feet.

00:49:17.370 --> 00:49:19.760
So you would then be required

00:49:19.760 --> 00:49:22.180
to identify, and this is
the easiest way to do it

00:49:22.180 --> 00:49:26.030
and what we tell folks is once
you know what that radius is,

00:49:26.030 --> 00:49:29.690
draw around the well and
wherever falls outside the lease,

00:49:29.690 --> 00:49:32.410
or if it falls within
a tract that has less

00:49:32.410 --> 00:49:36.070
than 100% interest under
lease, that's who, you know,

00:49:36.070 --> 00:49:39.720
you need to identify,
so in this example here,

00:49:39.720 --> 00:49:41.810
the effected parties are these folks

00:49:41.810 --> 00:49:43.690
in this offsetting tract

00:49:43.690 --> 00:49:46.663
where the radius falls
outside of the lease.

00:49:49.750 --> 00:49:52.040
So for our directional well,

00:49:52.040 --> 00:49:53.790
again, as David explained earlier,

00:49:53.790 --> 00:49:56.680
this is information
that we're capturing,

00:49:56.680 --> 00:49:58.610
that our system is going to use

00:49:58.610 --> 00:50:02.220
to run its rule 37 validations against.

00:50:02.220 --> 00:50:04.410
So we trigger an
exception based on this.

00:50:04.410 --> 00:50:07.770
So how do we figure out
who's an effective party?

00:50:07.770 --> 00:50:10.483
So basically the same
way we did as a vertical well,

00:50:11.418 --> 00:50:13.757
but that radius that we're using

00:50:13.757 --> 00:50:15.550
is shifting to the bottom pole.

00:50:15.550 --> 00:50:19.120
So we're going to say
this is still a Wild Cat Well,

00:50:19.120 --> 00:50:21.930
and so we're going to
shift that 600 foot radius

00:50:21.930 --> 00:50:24.670
from the surface location
to the bottom hole,

00:50:24.670 --> 00:50:27.590
because that's what's
triggering the exception.

00:50:27.590 --> 00:50:30.370
And wherever that falls out

00:50:31.710 --> 00:50:34.070
is where you had to
identify the effected parties.

00:50:34.070 --> 00:50:37.680
So these folks here would be
the ones that you would need

00:50:37.680 --> 00:50:39.980
to clearly identify on your plat,

00:50:39.980 --> 00:50:43.440
and if it's not you, then
provide service list or waivers

00:50:43.440 --> 00:50:47.153
for continued process and
to get that exception granted.

00:50:51.110 --> 00:50:54.849
So here we have the
example of a horizontal well

00:50:54.849 --> 00:50:58.063
that's in a regular field
with no special rules.

00:50:59.140 --> 00:51:02.450
So we've triggered the exception again,

00:51:02.450 --> 00:51:04.710
we're going to say this is Wild Cat.

00:51:04.710 --> 00:51:08.373
So this sausage-looking example here

00:51:10.570 --> 00:51:15.570
is 600 feet around the
productive portion of the well,

00:51:16.820 --> 00:51:20.110
so here's the first take point.

00:51:20.110 --> 00:51:22.910
Here's the last take point, so,

00:51:22.910 --> 00:51:26.080
because remember,
this is the point of the well,

00:51:26.080 --> 00:51:29.280
from the first take point
to the last take point,

00:51:29.280 --> 00:51:31.640
and you can stop and perforate anywhere,

00:51:31.640 --> 00:51:34.740
'cause again, this is a
permit and this is a proposal.

00:51:34.740 --> 00:51:36.420
You haven't done anything yet.

00:51:36.420 --> 00:51:38.750
So we're looking at
a worst case scenario

00:51:38.750 --> 00:51:42.120
that you could perforate
the entire length of that well.

00:51:42.120 --> 00:51:43.830
So therefore the entire length

00:51:43.830 --> 00:51:45.803
of that well needs to be legal.

00:51:46.980 --> 00:51:48.980
And so that's why,
when we're looking at this,

00:51:48.980 --> 00:51:52.100
we've got identified this circle here,

00:51:52.100 --> 00:51:56.110
and these are the
effected parties out here

00:51:56.110 --> 00:51:57.600
if this were just a lease.

00:51:57.600 --> 00:52:00.290
Hopefully, our example is pretty simple,

00:52:00.290 --> 00:52:01.500
these are just leases,

00:52:01.500 --> 00:52:03.640
and so these are the
effected parties here.

00:52:03.640 --> 00:52:05.860
So I'm hoping that answers the question

00:52:05.860 --> 00:52:08.300
that came in earlier, but if not,

00:52:08.300 --> 00:52:11.583
we can always elaborate
more as we get further along.

00:52:13.850 --> 00:52:16.090
So now we have our

00:52:16.090 --> 00:52:19.060
special horizontal
dual lease line fields.

00:52:19.060 --> 00:52:22.313
So now we're looking
at two different distances

00:52:25.000 --> 00:52:27.363
that we're evaluating your well against.

00:52:29.640 --> 00:52:33.410
And David had a really good
diagram showing, you know,

00:52:33.410 --> 00:52:37.420
here's my first last take point.

00:52:37.420 --> 00:52:38.910
Here's my first last take point.

00:52:38.910 --> 00:52:43.790
And then here's my perpendicular
through that take point.

00:52:43.790 --> 00:52:45.710
And through that take point here.

00:52:45.710 --> 00:52:50.710
So if this box were to fall
outside anywhere of my lease

00:52:51.160 --> 00:52:53.763
or pooled unit, it would
trigger the rule exception.

00:52:55.050 --> 00:52:56.870
So that's what that would look like,

00:52:56.870 --> 00:52:59.470
but it also would look the same

00:52:59.470 --> 00:53:03.010
when we're trying to figure
out who's an affected party.

00:53:03.010 --> 00:53:06.770
So if we're using the
Spraberry Trend as an example,

00:53:06.770 --> 00:53:11.750
there is no between well
spacing and for a horizontal well,

00:53:11.750 --> 00:53:13.420
the rules state that, you know,

00:53:13.420 --> 00:53:16.102
we're looking at a
first and last take point

00:53:16.102 --> 00:53:18.230
of 100 feet and perpendicular 330.

00:53:18.230 --> 00:53:23.040
So this would also then
really be our notification area

00:53:23.040 --> 00:53:23.980
that we're looking at.

00:53:23.980 --> 00:53:26.760
So anywhere where that
would fall outside our lease

00:53:26.760 --> 00:53:30.870
would identify those affected
parties that you would have

00:53:30.870 --> 00:53:32.560
to identify on the plat

00:53:32.560 --> 00:53:35.123
and provide some sort of resolution for.

00:53:37.040 --> 00:53:39.223
And this is where that
information resides,

00:53:40.639 --> 00:53:43.900
so if you're not
familiar with this screen,

00:53:43.900 --> 00:53:45.730
this is going to be very helpful to you.

00:53:45.730 --> 00:53:46.900
It's going to show you

00:53:46.900 --> 00:53:51.050
what those are first and
last take point provisions are.

00:53:51.050 --> 00:53:55.780
If there's special distance
provisions or profiles of well

00:53:55.780 --> 00:53:58.000
so in some fields you may have

00:53:59.989 --> 00:54:02.296
zero horizontal-to-horizontal well

00:54:02.296 --> 00:54:03.470
zero vertical-to-vertical,

00:54:03.470 --> 00:54:04.970
but if it's a horizontal vertical,

00:54:04.970 --> 00:54:06.300
there could be a distance.

00:54:06.300 --> 00:54:10.680
So this is very important to
kind of find that information

00:54:10.680 --> 00:54:13.050
that's going to be useful to you

00:54:13.050 --> 00:54:14.853
when you're applying for your well.

00:54:15.958 --> 00:54:18.200
And then down here, you'll see,

00:54:18.200 --> 00:54:22.980
we include the orders for these fields

00:54:22.980 --> 00:54:26.250
that start establishing
these special horizontal rules.

00:54:26.250 --> 00:54:27.810
And this particular field,

00:54:27.810 --> 00:54:30.590
there may be 10 other
orders prior to this,

00:54:30.590 --> 00:54:33.150
but we're only going to list starting

00:54:33.150 --> 00:54:35.150
when the first order came in

00:54:35.150 --> 00:54:37.643
with these new special horizontal rules.

00:54:40.930 --> 00:54:44.940
And so here's the example
of my first take point

00:54:44.940 --> 00:54:47.830
was less than 100
feet to the lease line.

00:54:47.830 --> 00:54:50.240
But when I'm trying to figure
out who is the pickup party,

00:54:50.240 --> 00:54:52.640
well, it's those folks right over here

00:54:52.640 --> 00:54:53.990
because everywhere else,

00:54:53.990 --> 00:54:56.633
I'm within the boundaries of my lease.

00:54:59.780 --> 00:55:02.930
If I had the special horizontal
rules again, here, you see,

00:55:02.930 --> 00:55:06.220
that's the part that's outside my lease.

00:55:06.220 --> 00:55:08.743
So these are the effected parties here.

00:55:11.690 --> 00:55:16.690
If we have an oddly shaped
lease boundary, I'm okay here,

00:55:17.730 --> 00:55:21.150
but this is where I'm
triggering the exception.

00:55:21.150 --> 00:55:25.750
And so these, the folks over
here on this adjacent tract

00:55:25.750 --> 00:55:27.353
that are the affected parties.

00:55:30.720 --> 00:55:32.780
What we see a lot of
times we'll folks are going

00:55:32.780 --> 00:55:35.730
to look at on their plat, well,
what's my first take point,

00:55:35.730 --> 00:55:37.020
what's my last take point?

00:55:37.020 --> 00:55:39.059
And that's the information
I'm going to use,

00:55:39.059 --> 00:55:42.470
and they're failing to evaluate

00:55:42.470 --> 00:55:45.000
the entire length of the wellbore.

00:55:45.000 --> 00:55:46.670
So as we can see here,

00:55:46.670 --> 00:55:49.860
this is less than the
field rules required,

00:55:49.860 --> 00:55:54.860
or this is a legal distance
here, but here it isn't.

00:55:54.880 --> 00:55:56.869
And so this would be the distances

00:55:56.869 --> 00:56:00.300
they should be using,
not what's up here,

00:56:00.300 --> 00:56:02.390
'cause this is the appropriate distance

00:56:02.390 --> 00:56:03.850
and that's going to
trigger the exception

00:56:03.850 --> 00:56:06.680
so that way you'll know to provide us

00:56:06.680 --> 00:56:09.142
with the appropriate information

00:56:09.142 --> 00:56:11.423
to get this resolved in a timely manner.

00:56:13.350 --> 00:56:14.470
All right.

00:56:14.470 --> 00:56:16.940
So we're going to jump
into this next part real quick.

00:56:16.940 --> 00:56:19.860
And a lot of this has
been discussed already,

00:56:19.860 --> 00:56:22.640
so I'll stop at the ones
that I think that we need

00:56:22.640 --> 00:56:26.333
to spend couple of moments
on and finish this guy up.

00:56:28.020 --> 00:56:30.930
So between well, as you may know,

00:56:30.930 --> 00:56:33.626
is the distance between two wells,

00:56:33.626 --> 00:56:36.390
on the same lease in the same field.

00:56:36.390 --> 00:56:39.960
So the field rule requires
me to be 1200 feet apart.

00:56:39.960 --> 00:56:42.370
If this distance is less than 1200,

00:56:42.370 --> 00:56:45.460
I'm triggering that
between well exception,

00:56:45.460 --> 00:56:46.693
very straightforward.

00:56:48.410 --> 00:56:53.410
The notification parameters
for between well exception

00:56:53.740 --> 00:56:57.900
are all offsets around the entire lease

00:56:57.900 --> 00:57:01.710
or pooled unit and
any that are within half

00:57:01.710 --> 00:57:03.747
of the between well spacing.

00:57:03.747 --> 00:57:06.016
So we'll cover that here shortly

00:57:06.016 --> 00:57:07.883
'cause that's kind of confusing.

00:57:10.059 --> 00:57:14.850
And then you have to realize
in some fields in your orders,

00:57:14.850 --> 00:57:17.270
you may have special
notification requirements.

00:57:17.270 --> 00:57:20.850
It's really important to
understand if in your field rules,

00:57:20.850 --> 00:57:24.060
there are different
notification requirements rather

00:57:24.060 --> 00:57:27.763
than what's under
Statewide rule 38 or 37.

00:57:29.200 --> 00:57:30.970
So rule 38 is basically,

00:57:30.970 --> 00:57:33.660
I've got too many wells on my lease.

00:57:33.660 --> 00:57:35.980
That's a bad problem to have,

00:57:35.980 --> 00:57:38.080
but there's a way to get an exception.

00:57:38.080 --> 00:57:41.870
And then depending on
if I'm in a UFT field or not,

00:57:41.870 --> 00:57:45.380
I may need not have an
exception because my vertical wells

00:57:45.380 --> 00:57:48.500
don't count against my
horizontal wells and vice versa.

00:57:48.500 --> 00:57:50.740
So this is, again,

00:57:50.740 --> 00:57:54.460
we don't see a lot of
traditional rule 38s anymore

00:57:54.460 --> 00:57:58.300
because of the fact that
we're drilling a majority,

00:57:58.300 --> 00:58:00.740
the majority of the wells
being drilled are in these

00:58:02.120 --> 00:58:05.560
UFT fields where the
vertical wells don't count

00:58:05.560 --> 00:58:10.370
against your well count,
so this is still ongoing.

00:58:12.470 --> 00:58:15.140
And so here's what the requirements are,

00:58:15.140 --> 00:58:18.653
but we'll look at the example
here, the diagram here.

00:58:20.100 --> 00:58:21.693
So here's my lease.

00:58:23.420 --> 00:58:26.740
And so the rule says
that all tracts adjacent

00:58:26.740 --> 00:58:31.030
to my lease are where I have
to look for affected parties,

00:58:31.030 --> 00:58:33.280
but I also had to do

00:58:33.280 --> 00:58:38.280
a half of the between well
spacing radius around my well

00:58:39.290 --> 00:58:42.539
because this could be
a very narrow lease here

00:58:42.539 --> 00:58:45.450
and there could be
another lease on this side

00:58:45.450 --> 00:58:49.460
that could still fall within
the drainage area of this well.

00:58:49.460 --> 00:58:51.250
And so those folks would be entitled

00:58:51.250 --> 00:58:52.340
to notice, because again,

00:58:52.340 --> 00:58:55.740
between well exceptions
or rule 38 exceptions

00:58:55.740 --> 00:58:58.229
or drainage issue, and
we want to make sure

00:58:58.229 --> 00:59:02.750
that those folks who were
potentially could be impacted

00:59:02.750 --> 00:59:06.290
have a right and get notice
concerning your request

00:59:06.290 --> 00:59:07.540
for an exception of that.

00:59:10.780 --> 00:59:12.760
So again, you know four things

00:59:12.760 --> 00:59:16.290
that we need to get out of
what the plat needs to show.

00:59:16.290 --> 00:59:19.020
If it's not certified by a surveyor

00:59:19.020 --> 00:59:22.234
then we should see
some sort of certification

00:59:22.234 --> 00:59:25.490
from the folks who are
submitting the application.

00:59:25.490 --> 00:59:28.420
We need to make sure
that affected parties

00:59:28.420 --> 00:59:31.113
are clearly labeled on the plat.

00:59:32.070 --> 00:59:34.400
And if this plat is being filed

00:59:34.400 --> 00:59:37.690
in support of a PSA or allocation well,

00:59:37.690 --> 00:59:41.940
that all the tracts that
are being developed

00:59:41.940 --> 00:59:45.300
are clearly labeled
and outlined on the plat.

00:59:45.300 --> 00:59:47.280
So we send out quite a few problems

00:59:47.280 --> 00:59:50.300
because we're not
seeing the entire boundary.

00:59:50.300 --> 00:59:52.080
And if we can't see the entire boundary,

00:59:52.080 --> 00:59:55.500
then we're not able to
ensure the density is being met

00:59:55.500 --> 00:59:58.803
and that your P16s are
being filled out correctly.

01:00:01.250 --> 01:00:03.020
So how can I resolve my exceptions?

01:00:03.020 --> 01:00:05.350
Well, there's a couple
of paths we can take

01:00:05.350 --> 01:00:08.800
and let's kind of quickly go
over a couple of those guys.

01:00:08.800 --> 01:00:11.110
We can do Non-Current Productions.

01:00:11.110 --> 01:00:13.830
So that means that you
can tell the Commission

01:00:13.830 --> 01:00:16.320
that those wells that are triggering

01:00:16.320 --> 01:00:20.560
the between well exception
or the rule 38 will be shut in

01:00:20.560 --> 01:00:23.120
at the time of completion
of the current well.

01:00:23.120 --> 01:00:27.620
So therefore they wouldn't
be in violation of the rule and

01:00:27.620 --> 01:00:30.610
any well that could
potentially trigger that exception

01:00:30.610 --> 01:00:33.850
would be a well, that
would need to be shut in.

01:00:33.850 --> 01:00:36.710
So it could be one, well,
it could be multiple wells,

01:00:36.710 --> 01:00:41.030
but that is an option for
you as the applicant to take,

01:00:41.030 --> 01:00:45.060
without having to go
through a full-blown exception.

01:00:45.060 --> 01:00:48.230
If it's a lease line exception,
and we get this question

01:00:48.230 --> 01:00:50.370
a lot, can I use a Non-Perforation Zone

01:00:51.710 --> 01:00:54.560
to satisfy a between well
exception or a rule 38?

01:00:54.560 --> 01:00:57.100
No, The Non-Perforation Zone

01:00:57.100 --> 01:01:00.170
is for rule 37 lease
line exceptions only.

01:01:00.170 --> 01:01:03.940
So again, if you clearly
label and use it appropriately,

01:01:03.940 --> 01:01:07.853
that could resolve the need
to go through an exception.

01:01:09.490 --> 01:01:12.039
If I have a between well issue,

01:01:12.039 --> 01:01:14.170
I may have an Entity For Density.

01:01:14.170 --> 01:01:16.900
So if you're operating in an older field

01:01:16.900 --> 01:01:19.090
and maybe you're in a waterflood unit,

01:01:19.090 --> 01:01:23.040
you may have an approved
Entity For Density for your unit.

01:01:23.040 --> 01:01:25.060
And therefore that's what you would use

01:01:25.060 --> 01:01:27.890
to resolve a between
well exception issue.

01:01:27.890 --> 01:01:31.220
But be aware that sometimes
some of these old dockets

01:01:31.220 --> 01:01:34.520
had specific lease line requirements

01:01:34.520 --> 01:01:36.430
that are different from the normal rules

01:01:36.430 --> 01:01:39.110
and so you need to make
sure that you're well is compliant

01:01:39.110 --> 01:01:41.843
to any of those special requirements.

01:01:44.370 --> 01:01:47.610
If I am going through
and getting a resolution

01:01:47.610 --> 01:01:51.520
with an exception, I can
choose to be my own offset

01:01:51.520 --> 01:01:54.388
if you are the owner of the interest

01:01:54.388 --> 01:01:56.290
in the offsetting tract,

01:01:56.290 --> 01:01:58.983
you must clearly label that on the plat.

01:02:00.060 --> 01:02:01.900
We've talked about waivers.

01:02:01.900 --> 01:02:04.500
You can provide a waiver
from the effected party

01:02:05.799 --> 01:02:08.923
and they, you provide
them a plat and show them

01:02:08.923 --> 01:02:11.660
what they're waiving their rights for.

01:02:11.660 --> 01:02:14.700
And that can be used
to resolve your exception.

01:02:14.700 --> 01:02:19.370
And then you can
also, if, we see this a lot,

01:02:19.370 --> 01:02:22.900
formed a joint operating
agreement with somebody,

01:02:22.900 --> 01:02:25.820
then part of that should be addressing

01:02:25.820 --> 01:02:29.030
the need for rule 37s potentially,

01:02:29.030 --> 01:02:32.970
and the idea of acreage assignments,

01:02:32.970 --> 01:02:36.040
because if you're buying the
permit and you're assigning

01:02:36.040 --> 01:02:39.400
the acres, well, then they're
not going to be able to,

01:02:39.400 --> 01:02:42.400
if they are still buying permits
to use that same acreage

01:02:42.400 --> 01:02:45.230
again, without would
be in violation of rule 40.

01:02:45.230 --> 01:02:47.330
So that's something that
you need to be aware of

01:02:47.330 --> 01:02:50.090
if you're going into these
types of specialized agreements

01:02:50.090 --> 01:02:51.883
with other operators.

01:02:53.050 --> 01:02:55.780
So here's a very straightforward
example of a waiver.

01:02:55.780 --> 01:02:57.570
You know, it can be as simple as this,

01:02:57.570 --> 01:03:00.760
or we've seen multiple page
documents that are being used.

01:03:00.760 --> 01:03:03.090
So it's up to you as long as it covers

01:03:04.291 --> 01:03:07.060
and talks about what it is being waived.

01:03:07.060 --> 01:03:09.220
Is it a rule 37, is it rule 38,

01:03:09.220 --> 01:03:11.070
is it an off-lease penetration point,

01:03:11.070 --> 01:03:12.490
whatever the case may be,

01:03:12.490 --> 01:03:14.690
it just needs to be clearly indicated

01:03:14.690 --> 01:03:16.933
as what the waiver is for.

01:03:19.430 --> 01:03:20.850
There are some instances

01:03:20.850 --> 01:03:24.490
where you can claim unaffected status

01:03:24.490 --> 01:03:28.230
and that could be used
if the effected party is

01:03:28.230 --> 01:03:30.133
in another state or another country.

01:03:31.010 --> 01:03:34.890
So that could be used
to not require you to have

01:03:34.890 --> 01:03:37.590
to potentially notify anybody

01:03:37.590 --> 01:03:40.053
in New Mexico, Oklahoma, or Mexico.

01:03:41.530 --> 01:03:44.510
You could also use unaffected status

01:03:44.510 --> 01:03:47.950
for between well and
a rule 38 exception,

01:03:47.950 --> 01:03:50.690
but you have to provide
a little bit more information

01:03:50.690 --> 01:03:53.504
and you have to
request that specifically

01:03:53.504 --> 01:03:55.220
from the Commission.

01:03:55.220 --> 01:03:57.950
And that request would be reviewed

01:03:57.950 --> 01:04:00.530
by our engineering unit to determine

01:04:00.530 --> 01:04:04.350
if what you're providing
and what you're showing

01:04:04.350 --> 01:04:08.620
on the supporting documentation warrants

01:04:08.620 --> 01:04:10.420
the approval of that request or not.

01:04:13.800 --> 01:04:16.310
Remember, again, some of these fields

01:04:16.310 --> 01:04:20.420
have special notification requirements.

01:04:20.420 --> 01:04:25.160
So if your field does, and
that's what you're using,

01:04:25.160 --> 01:04:26.450
you need to make sure you check yes

01:04:26.450 --> 01:04:29.740
'cause if you, if you don't
check, yes, the default is no.

01:04:29.740 --> 01:04:32.509
And we're going to review
that exception request

01:04:32.509 --> 01:04:35.170
against standard Statewide rules.

01:04:35.170 --> 01:04:37.800
And if you haven't provided
the necessary information,

01:04:37.800 --> 01:04:39.140
then you'll get a problem letter

01:04:39.140 --> 01:04:43.090
from us because you'll be
required to submit geologic data

01:04:44.089 --> 01:04:47.170
and so forth to gain that
exception, so make sure,

01:04:47.170 --> 01:04:50.410
especially if you're in a
UFT field and you're applying

01:04:50.410 --> 01:04:53.530
for a rule 38 and you're using

01:04:53.530 --> 01:04:56.290
those special notification parameters

01:04:56.290 --> 01:04:59.123
that you make sure you check that, yes.

01:05:01.930 --> 01:05:05.170
And then if we're
resolving with the notice,

01:05:05.170 --> 01:05:08.010
so you'll provide us that service list,

01:05:08.010 --> 01:05:09.990
we're going to get best services out

01:05:09.990 --> 01:05:13.170
to all the folks you've identified.

01:05:13.170 --> 01:05:17.263
We're going to wait 21
days, and if nobody protests,

01:05:17.263 --> 01:05:20.120
then we can approve that application.

01:05:20.120 --> 01:05:21.610
The same with publication,

01:05:21.610 --> 01:05:24.610
we'll send out the notice to those folks

01:05:24.610 --> 01:05:27.100
that we do have a good address for.

01:05:27.100 --> 01:05:29.900
We'll provide you
the notice that you will

01:05:29.900 --> 01:05:33.330
then publish for the
specified length of time.

01:05:33.330 --> 01:05:36.610
But we also ask that you
provide a due diligence letter

01:05:36.610 --> 01:05:38.980
with that request to explain

01:05:38.980 --> 01:05:43.970
why you need to be
able to publish that notice.

01:05:43.970 --> 01:05:44.803
Okay?

01:05:46.860 --> 01:05:49.420
And really important,
the four things you need

01:05:49.420 --> 01:05:52.829
to remember about when
we're looking at the NOA,

01:05:52.829 --> 01:05:56.000
the issuance date
and that term out date.

01:05:56.000 --> 01:05:58.300
Because again those timeframes,

01:05:58.300 --> 01:06:01.410
that seven days from
the date of issuance

01:06:01.410 --> 01:06:05.280
or the seven days
prior to the term out date

01:06:05.280 --> 01:06:08.350
are very important when
it comes to making sure

01:06:08.350 --> 01:06:11.963
that you publish your
notice in the correct manner,

01:06:13.150 --> 01:06:14.903
which are those guys right there.

01:06:16.260 --> 01:06:19.789
And there are the instructions
making sure that again,

01:06:19.789 --> 01:06:22.940
we try to give you as
much information as we can,

01:06:22.940 --> 01:06:25.490
but we can't help you
if you don't help us.

01:06:25.490 --> 01:06:27.973
So as David said earlier, you know,

01:06:29.320 --> 01:06:31.960
we're working with this
together with you to make sure

01:06:31.960 --> 01:06:34.390
we serve you as best we can.

01:06:34.390 --> 01:06:39.000
And if you don't meet this
requirement, you will be told

01:06:39.000 --> 01:06:44.000
to re-notice and re-publish
that notification request.

01:06:46.180 --> 01:06:48.800
And so if you know,
you're going to miss it,

01:06:48.800 --> 01:06:52.030
let us know, we can regenerate
and get you a new notice

01:06:52.030 --> 01:06:54.410
that will help you meet
those requirements.

01:06:54.410 --> 01:06:56.100
But if you don't let us know,

01:06:56.100 --> 01:06:57.650
there's no way we can help you.

01:06:59.780 --> 01:07:03.960
And so, you know, I
won't bother you with this.

01:07:03.960 --> 01:07:08.960
Again, if you are doing a
rule 38 in a non UFT field,

01:07:10.240 --> 01:07:12.360
you need to remember to supply

01:07:13.630 --> 01:07:17.490
certain data that our
engineering unit will evaluate.

01:07:17.490 --> 01:07:21.713
And here's the example of
what some of that information is.

01:07:23.610 --> 01:07:25.323
That's there for you to look at.

01:07:26.260 --> 01:07:28.780
Here's an example of some data

01:07:28.780 --> 01:07:31.333
that was supplied for request.

01:07:32.770 --> 01:07:37.038
Rule 38 could be
resolved with a form W1A,

01:07:37.038 --> 01:07:40.630
this will work for the
first well on a lease

01:07:40.630 --> 01:07:43.100
or the last well on the
lease as long as you have

01:07:43.100 --> 01:07:46.390
the require tolerance acreage

01:07:47.240 --> 01:07:49.560
that stated in your field rules.

01:07:49.560 --> 01:07:53.240
And this will work if that
tract took its size and shape

01:07:53.240 --> 01:07:57.910
prior to the establishment
of field rules in that area.

01:07:57.910 --> 01:08:00.410
So this could be a way that you can gain

01:08:00.410 --> 01:08:04.700
an exception if it meets
one of those two criteria.

01:08:04.700 --> 01:08:08.130
And there's a copy
of what that looks like.

01:08:08.130 --> 01:08:12.710
And that is the end
of this presentation.

01:08:12.710 --> 01:08:16.970
I'm thankful if you
stayed us the entire time.

01:08:16.970 --> 01:08:19.640
I know a lot of you
get out at four o'clock

01:08:19.640 --> 01:08:22.520
and hopefully I haven't
delay you too long.

01:08:22.520 --> 01:08:24.360
If you have any questions

01:08:24.360 --> 01:08:27.819
about any of the information
that you've seen on here,

01:08:27.819 --> 01:08:30.440
or want to get back
with us at a later time,

01:08:30.440 --> 01:08:32.430
feel free to email us.

01:08:32.430 --> 01:08:33.680
We'll be more than happy

01:08:33.680 --> 01:08:38.350
to answer any specific
questions you may have.

01:08:38.350 --> 01:08:39.830
Is there anything that we need

01:08:39.830 --> 01:08:44.830
to cover David that
came in on the Q and A?

01:08:46.140 --> 01:08:48.230
<v David>No, we have taken
care of the questions,</v>

01:08:48.230 --> 01:08:52.119
just a few, you know, thank
you, excellent presentation.

01:08:52.119 --> 01:08:53.640
So we are solid.

01:08:53.640 --> 01:08:55.750
<v Instructor>Okay, and as
David mentioned earlier,</v>

01:08:55.750 --> 01:08:59.910
you know, we do this
for you because again,

01:08:59.910 --> 01:09:03.410
we're in this together and
we work jointly together

01:09:03.410 --> 01:09:05.370
with you to make you successful,

01:09:05.370 --> 01:09:08.310
and if you're successful,
we're successful, so, you know,

01:09:08.310 --> 01:09:11.790
let us know what we can
provide you with extra services.

01:09:11.790 --> 01:09:15.100
We can provide you a link to this video

01:09:15.100 --> 01:09:18.140
will be on our website
so that you have folks

01:09:18.140 --> 01:09:20.810
in your office who were
not able to attend, you know,

01:09:20.810 --> 01:09:24.080
download it for them and pass
around your office, you know,

01:09:24.080 --> 01:09:26.150
these are all informational

01:09:26.150 --> 01:09:30.523
for you when again is to get
you the information you need.

01:09:31.360 --> 01:09:34.810
So you can get from us
what you need, (laughs)

01:09:34.810 --> 01:09:36.730
if I can say it that way.

01:09:36.730 --> 01:09:39.000
So once again, thank you very much.

01:09:39.000 --> 01:09:43.790
Thanks for the folks here
in our support division,

01:09:43.790 --> 01:09:47.240
our communication folks,
Michelle Banks, and Dave McElwain.

01:09:47.240 --> 01:09:49.110
Who've helped present these themes

01:09:50.289 --> 01:09:52.870
and Jenny and Molly who
helped set all this information up

01:09:52.870 --> 01:09:56.220
and who many of you deal
with on the back end of all this.

01:09:56.220 --> 01:09:59.020
So thank you all very much
and y'all have a great night.