SPACING
Vertical
Horizontal
Week Three
September 9, 2010
Eric R. King
Conservation
• 52 O.S. 87.1
• Common Source of Supply of Oil
• Well Spacing and Drilling Units
Spacing
• Actual Notice at least 15 days prior to Hearing to
all parties who have the right to share in
production
• File Application
• Notice Regular Mail at least 15 days before
Hearing
• Publication Notice – At least 15 days in County
where Land is situated and Oklahoma County
before the Hearing
• Hearing
• Issues
OAC 5-7-6
Drilling and spacing unit establishment or
modification
(a) Notice of hearing relating to drilling and
spacing units shall be published one time at
least fifteen (15) days prior to the hearing in
a newspaper of general circulation published
in Oklahoma County, Oklahoma, and in a
newspaper of general circulation published in
each county in which lands embraced in the
application are located.
(b) When an applicant proposes to establish,
vacate, alter, modify, amend, or extend a
drilling and spacing unit, the application and
notice shall be served by the applicant no less
than fifteen (15) days prior to the date of the
hearing, by regular mail, upon each person or
governmental entity having the right to
participate in production from the proposed
drilling and spacing unit or the existing drilling
and spacing unit.
(c) A plat or plats shall be attached to each
application for an order to establish a drilling
and spacing unit or units or to extend existing
spacing within a common source or sources of
supply, which plat shall show the spacing units
requested together with any spacing units
abutting or overlapping the area to be spaced,
and any abutting spacing units in all spaced
formations. An amended plat shall be provided
at the time of the hearing in the event drilling
and spacing units have been established after
the application was filed and prior to the
hearing to reflect the status of the spacing at the
time of the hearing.
(d) An application to extend spacing from an
adjacent drilling and spacing unit shall state in
the body of the application the most recent
order number that created the spacing in the
adjacent unit that applies to the common
sources of supply which are sought to be
extended by the application. Such request to
extend spacing and citation to the most recent
order number shall be placed in the special
relief paragraph of the notice of hearing.
(e) Where a well has not been commenced to or
completed in the common source of supply
sought to be spaced, notice of hearing for an
order to vacate, alter, amend, extend, or change
a prior spacing order shall be served and
published as required in (a) of this Section. Such
request to vacate, alter, amend, extend, or
change a prior spacing order shall be placed in
the special relief paragraph of the notice of
hearing.
(f) Where two or more orders have issued
spacing a common source of supply and such
spacing orders have resulted in there being a
conflict either as to the size of the unit or as to a
common source of supply or a conflict as to the
nomenclature of the common source of supply,
then the applicant seeking to vacate, alter,
amend, or change one of the prior spacing
orders shall either file an application to construe
and modify the conflicting orders or may amend
a relevant application to accomplish the same
result. Notice of hearing shall be served and
published as required upon the commencement
of a proceeding.
(g) The Commission may issue an order
establishing horizontal well units for a common
source of supply.
(h) No order of the Commission authorizing a
horizontal well unit that overlies any existing
well or portion of any existing drilling and
spacing unit producing from the same common
source of supply will become effective until at
least fifty percent (50%) of the ownership having
a right to drill in each such well and/or drilling
and spacing unit consents in writing to the
horizontal well unit by filing such written
consent with the Court Clerk of the Commission
in such cause. In addition, if the boundaries of
the horizontal well unit do not encompass such
existing drilling and spacing unit in its entirety,
then the application and notice for the
horizontal well unit shall be served by the
applicant no less than fifteen (15) days prior to
the date of the hearing, by regular mail, upon
each person on governmental entity having the
right to participate in production from the
existing drilling and spacing unit.
(i) Any written consent to the order required
under subsection (h) of this Section shall not be
a waiver of, nor commitment of, any rights of
such owners in either the existing production or
the proposed horizontal well unit. If the
required percentage of consent cannot be
obtained, the applicant may make application to
the Commission for a waiver of the consent
requirement, and upon a showing of good cause
by the applicant, the Commission may waive the
consent requirement.
General Well Spacing
Requirements
OAC 165:10-1-21
 Any unspaced common source of supply 2,500 feet or
more in depth – No closer than 330 feet from any
property line or 600 feet from any drilling or
producing oil or gas well from the same formation
 Any unspaced common source of supply 2,500 feet or
less in depth – No closer than 165 feet from any
property line or 300 feet from any drilling or
producing oil or gas well from the same formation
Drilling and Spacing Units
OAC 165: 10-1-22
(a) The Commission may establish drilling and spacing units
in any common source of supply a s provided by law, and the
special orders creating drilling and spacing units shall
supersede the provisions of 165:10-1-21. It shall be
The responsibility of any operator who proposes to drill a
well to ascertain the existence and provisions of special
spacing orders.
(b) The drilling of a well or wells in to a common source of supply
in an area covered by an application pending before the
Commission seeking the establishment of drilling and spacing
units is prohibited except by special order of the Commission.
However, if an Intent to Drill (Form 1000) has been approved by
the Commission and operations commenced prior to the filing of
a spacing application, the operator shall be permitted to drill and
complete the well without a special order of the Commission.
Permitted Well Locations
Within Standard Drilling
and Spacing Units
OAC 165: 10-1-24
• (a) The permitted well location within any standard square
drilling and spacing unit shall be the center of the unit. The
permitted well locations within standard rectangular drilling
and spacing units shall be the centers of alternate square
tracts constituting the units (alternate halves of the units);
provided, however, a well will be deemed drilled at the
permitted location if drilled within the following tolerance
areas:
 (1) Not less than 165 feet from the boundary of any
standard 10-acre drilling and spacing unit or the
proper square 10-acre tract within any standard 20acre drilling and spacing unit.
 (2) Not less than 330 feet from the boundary of any
standard 40-acre drilling and spacing unit or the
proper square 40-acre tract within any standard 80acre drilling and spacing unit.
 (3) Not less than 660-feet from the boundary of any
standard 160-acre drilling and spacing unit or the
proper square 160-acre tract within any standard
320-acre drilling and spacing unit.
 (4 ) Not less than 1320 feet from the boundary of
any standard 640-acre drilling and spacing unit.
A Township - 36 Sections of Land
640 acres (Section)
320 acres (Half Section)
160 acres (Quarter Section)
Drilling and Spacing Units
•
•
•
•
•
•
A Township - 36 Sections of Land
Size of Drilling and Spacing Units
80 acres – Stand-Up or Lay-Down Units
40 acres (Quarter Quarter Section)
20 acres Stand-Up or Lay-Down Units
10 acres (Quarter Quarter Quarter Section)
Proper Well Location Requirements
(Continued)
• 640 acres - No closer than 1320 feet from unit
boundaries
• 320 acres - Stand-Up or Lay-Down Units – No
closer than 660 feet from proper Quarter Section
i.e. on NW-SE proper location within each 320
acre unit (or can be NE-SW)
• 160 acres –No closer than 660 from unit
boundaries
• 80 acres – Stand-Up or Lay-Down Units – No
closer than 330 feet from proper Quarter Quarter
Section i.e. on NW-SE proper location within each
80 acre unit (or can be NE-SW)
Proper Well Location Requirements
continued
• 40 acres No closer than 330 feet from unit boundary
• 20 acres Stand-Up or Lay-Down Units - No closer
than 165 feet from proper Quarter Quarter Section
i.e. on NW-SE proper location within each 20 acre
unit (or can be NE-SW)
• 10 acres – No closer than 165 feet from unit
boundary
Vertical
Drilling and Spacing Causes
Samples applications/notices/orders
• 40-acre units
• 80 acre stand-up units
• 160-acre units
• 320-acre lay-down Units
• 640-acre units
Horizontal Drilling Offshore
Horizontal Drilling Texas
Horizontal Drilling compared to
Slant Hole Drilling
Horizontal Drilling
OAC 165: 10-3-28
Definitions. The following words
and terms, when used in this
Section, shall have the following
meaning, unless the context clearly
indicates otherwise:
(1) "Horizontal well" shall mean a well drilled, completed, or
recompleted with one or more laterals in a common source of
supply in a manner in which, for at least one lateral, the
horizontal component of the completion interval in the common
source of supply exceeds the vertical component thereof and the
horizontal component extends a minimum of 150 feet in the
formation.
(2) "Point of entry" shall mean the point at which the borehole
first intersects the top of the common source of supply.
(3) "True vertical depth" shall mean that depth at the point of
entry perpendicular to the surface as measured from the
elevation of the kelly bushing on the drilling rig.
(4) "Terminus" shall mean the end point of the borehole in the
common source of supply.
(5) "Completion interval" shall mean, for open hole
completions, the interval from the point of entry to the
terminus and, for cased and cemented completions, the interval
from the first perforations to the last perforations.
(6) "Horizontal well unit" shall mean a drilling and spacing unit
established by the Commission, after application, notice, and
hearing, for a common source of supply into which a horizontal
well has been or will be drilled.
(7) "Standard horizontal well unit" shall mean a horizontal well
unit that is a square 10-, 40-, 160-, or 640-acre tract or a
rectangular 20-, 80-, or 320-acre tract in accordance with OAC
165:10-1-22.
(8) "Non-standard horizontal well unit" shall mean a horizontal
well unit that is not a standard horizontal well unit.
(9) "Conventional reservoir" shall mean a common source of
supply that is not an unconventional reservoir.
(10) "Unconventional reservoir" shall mean a common source of
supply that is a shale or a coal bed. "Unconventional reservoir"
shall also mean any other common source of supply designated
as such by Commission order or rule.
(11) "Directional survey" shall mean that survey or report
showing the location of any point of the wellbore as it relates to
the surveyed surface location from the surface to the terminus
of each lateral.
(12) "Date of first production" shall mean the date
hydrocarbons are first produced from the horizontal well,
whether or not production occurs during drilling, completion, or
through permanent surface equipment.
(13) "Vertical component" shall mean the calculated vertical
distance from the point of entry to the terminus of the lateral.
(14) "Horizontal component" shall mean the calculated
horizontal distance from the point of entry to the terminus.
General horizontal drilling
requirements
(1) Within 30 days after completion of a horizontal well, the
operator shall show that the location of the completion interval
complies with the applicable general rule, location exception
order, or other order of the Commission by submitting the
following to the Technical Services Department:
(A) A directional survey run in the horizontal well.
(B) A plat constructed from the results of the directional
survey showing the completion interval.
(2) The completion interval of a horizontal well shall be located
not closer than the minimum distance as set out below from any
other oil or gas well completed in the same common source of
supply except as authorized by a special order of the
Commission:
(A) Three hundred feet from any other oil or gas well
completed in the same common source of supply that is less
than 2,500 feet in true vertical depth.
B) Six hundred feet from any other oil or gas well completed
in the same common source of supply that is 2,500 feet or
more in true vertical depth.
(C) This paragraph does not apply to horizontal wells drilled in
a unit created for secondary or enhanced recovery operations
pursuant to 52 O.S. § 287.1 et seq.
Horizontal well requirements in an
unspaced common source of supply.
In a horizontal well drilled in a common source of supply in
which the Commission has not established any drilling and
spacing units or horizontal well units, the completion interval of
a horizontal well may not be located closer to the boundaries of
the applicable mineral estate, oil and gas leasehold estate, or
voluntary unit than the minimum distance set out below except
as authorized by a special order of the Commission:
(1) Not less than 165 feet when the common source of supply
is less than 2,500 feet in true vertical depth.
(2) Not less than 330 feet when the common source of supply
is 2,500 feet or more in true vertical depth.
Drilling and spacing units
(1) A horizontal well may be drilled on any drilling and spacing
unit.
(2) A horizontal well unit may be created in accordance with
165:10-1-22 and 165:5-7-6. Such units shall be created as new
units after notice and hearing as provided for by the Rules of
Practice, OAC 165:5.
(3) The Commission may create a non-standard horizontal well
unit covering contiguous lands in any configuration or shape
deemed by the Commission to be necessary for the
development of a conventional reservoir or an
unconventional reservoir by the drilling of one or more
horizontal wells. A non-standard horizontal well unit may not
exceed 640 acres plus the tolerances and variances allowed
pursuant to 52 O.S. § 87.1.
(4) A horizontal well unit may be established for a common
source of supply for which there are already established nonhorizontal drilling and spacing units, and said horizontal well unit
may include within the boundaries thereof more than one
existing non-horizontal drilling and spacing unit for the common
source of supply.
(A) Horizontal well units may exist concurrently with
producing nonhorizontal drilling and spacing units.
(B) Horizontal well units shall supersede existing nondeveloped nonhorizontal drilling and spacing units.
Horizontal well location requirements
in horizontal well units.
Conventional reservoirs. In a conventional reservoir, the
completion interval of a horizontal well in a horizontal well unit
shall be located not less than the minimum distance from the
unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80- or
160-acre horizontal well unit.
(C) Not less than 660 feet from the boundary of any 320- or
640-acre horizontal well unit.
Unconventional reservoirs. In an unconventional reservoir, the
completion interval of a horizontal well in a horizontal well unit
shall be located not less than the minimum distance from the
unit boundary as follows:
(A) Not less than 165 feet from the boundary of any 10-, 20-,
or 40-acre horizontal well unit.
(B) Not less than 330 feet from the boundary of any 80-, 160-,
320-, or 640-acre horizontal well unit.
Alternative well location requirements.
The Commission may establish well location requirements
different from those provided in subsection (f) of this Section
when necessary to prevent waste and protect correlative rights.
These requirements may be established in the order creating a
standard or nonstandard horizontal well unit or through a special
rule of the Commission covering a conventional or
unconventional reservoir in a designated geographic area. (see
OAC 165:10, Subchapter 29, Special Area Rules).
Allowable
(1) Horizontal oil well allowables may be established
administratively using the standard allowables provided in
Appendix A (Allocated Well Allowable Table) supplemented by
the additional allowables provided in Appendix C (Table HD) to
this Chapter.
(2) The allowable for a horizontal gas well shall be computed in
the manner prescribed for a non-horizontal gas well in the same
common source of supply. The allowable for a horizontal well
unit with multiple horizontal gas wells shall be the sum of the
allowables for the separate horizontal gas wells. For this
summation, the allowable for each horizontal gas well will be
calculated as if it were the only well in the unit.
Pooling
Horizontal well units may be pooled as provided in 52 O.S. § 87.1
and Commission Rules of Practice, OAC 165:5.
OAC 165: 10-29-2
Alternative location requirements for horizontal
well units
(a) Scope and effect. The well location requirements of this
Section apply to horizontal wells completed in horizontal well
units in designated common sources of supply and geographic
areas as specified in this Section. Horizontal wells covered by
this Section are subject to OAC 165:10-3-28 and other applicable
Commission rules except as provided in this Section.
(b) Woodford shale.
(1) This subsection applies to horizontal wells completed in
the Woodford shale common source of supply in Atoka,
Blaine, Caddo, Canadian, Coal, Dewey, Grady, Haskell,
Hughes, Kingfisher, LeFlore, Latimer, McIntosh, Pittsburg,
and Sequoyah Counties.
(2) The completion interval of a horizontal well subject to this
subsection shall be located not less than the minimum
distance from the boundary of a standard or non-standard
horizontal well unit as follows:
(A) Not less than 330 feet from an east or west unit
boundary.
(B) Not less than 165 feet from a north or south unit
boundary.
Appendix C: Table HD
Recommended Additional Allowable for Horizontal Oil Wells
based on True Vertical Depth and Completion Interval
Average True Vertical Additional Allowable
Depth of Pool in Feet in Barrels per foot of
Completion Interval
To 4,000
.2
4,001 to 8,000
.3
8,001 to 12,000
.4
Greater than 12,000
.5
All oil produced and marketed during the drilling and completion
operations shall be charged against the allowable assigned to the
well upon completion.
Effective date of the allowable shall be the date of first
production.
Horizontal
Drilling and Spacing Causes
Sample application/notice/interim order/final
order
Sample Survey
Eric R. King
One Leadership Square, 15th Floor
211 N. Robinson Ave.
Oklahoma City, OK 73102
(405) 235-5518