Utah Admin. Code 649-3-4

Current through Bulletin No. 2024-21, November 1, 2024

Section R649-3-4 - Permitting of Wells to be Drilled, Deepened or Plugged-Back

1. Prior to the commencement of drilling, deepening or plugging back of any well, exploratory drilling such as core holes and stratigraphic test holes, or any surface disturbance associated with these activities, the owner shall submit a completed APD to the division and obtain approval by the division. Except as provided in Subsections (4), (5) and (11) below, only APDs submitted by an owner qualifying as a designated operator shall be approved by the division.

2. The following information shall be included for a completed APD:

2.1. The name, address, telephone number, and electronic contact information of the owner;

2.2. Proper identification of any relevant oil and gas leases, including identification of whether the leases are state, federal, Indian, or fee;

2.3. Proper identification of the federal or state unit, if the well is located within a federal or state unit.

2.4. A plat or map prepared by a licensed surveyor or engineer that accurately provides:

(a) the proposed well's surface and terminus location as perpendicular distances from Public Land Survey System (PLSS) section lines;

(b) the PLSS quarter-section or lot, section, township, range, and principal meridian where the proposed well is to be located;

(c) bearings and distances of any pertinent PLSS section lines;

(d) bearing and distance from the proposed well's surface to the proposed well's terminus location; and

(e) latitude and longitude coordinates of the proposed well's surface and terminus location, with any provided bearings, distances, and coordinates conforming to a coordinate reference system having datum, north reference, and measurement units acceptable to the division;

2.5. A copy of the Division of Water Rights approval, or the identifying number of approval, for use of water at the drilling site;

2.6. A drilling program containing the following information:

2.6.1. The estimated tops of important geologic markers;

2.6.2. The estimated depths at which the top and the bottom of anticipated water, oil, gas, or other mineral-bearing formations are expected to be encountered, and the plans for protecting such resources;

2.6.3. The minimum specifications for pressure control equipment to be used and a schematic diagram thereof showing sizes, pressure ratings or API series, proposed testing procedures and testing frequency;

2.6.4. Any supplementary information more completely describing the drilling equipment and casing program;

2.6.5. The type and characteristics of the proposed circulating medium to be employed in drilling, the quantities and types of mud and weighting material to be maintained, and the monitoring equipment to be used on the mud system;

2.6.6. The anticipated type and amount of testing, logging, and coring;

2.6.7. The expected bottom hole pressure and any anticipated abnormal pressures or temperatures or potential hazards, such as hydrogen sulfide, that are expected to be encountered, along with contingency plans for mitigating such identified hazards;

2.6.8. Any other relevant or unique information regarding the proposed oil and gas operations that would assist the division's assessment and consideration of the application; and

2.6.9. If an APD is for a proposed horizontal or directional well, a horizontal or directional well diagram clearly showing the well bore path, including the distance and bearing from the surface through the terminus of the lateral, the target location within the intended producing interval, a justification for any intentional deviation, and evidence that the written consent of the affected owners has been obtained, if required under other provisions of R649-3;

2.7. A se l f -certification from the owner, evidenced by an affidavit or declaration in conformity with Section 78B-18a-101, et seq., that the owner satisfies the criteria set forth in Subsection R649-2-4(1) or (2);

2.8. If the well will be located on the surface of state or fee lands, an APD will not be approved until an Onsite Predrill Evaluation is performed as outlined in Subsection R649-3-18.

3. The division shall approve the APD if it finds the APD to be complete and otherwise in accordance with the rules of the division and orders of the board. Notice of the approval shall be posted on the division's website in a readily accessible and clearly identifiable format.

4. After an APD is approved, a non-applicant working interest owner within the drilling unit; or in the absence of a board order establishing a drilling unit, a non-applicant owner who has either:

(a) a working interest in a lease covering the lands in which the well will physically penetrate and in the targeted formations from which the well will produce; or

(b) owns any unleased oil and gas in the lands which the well will physically penetrate and in the targeted formations from which the well will produce, may protest the APD approval and designation of operator by filing a request for agency action with the board within ten calendar days of the electronic posting of the approved APD by the division on its website in accordance with Section R649-2-4(3); provided, if a lease or contract to acquire a lease will expire before the 10-day period expires, the division may, in its sole discretion, shorten the 10-day period upon written application of the operator outlining those circumstances and providing a copy of the expiring lease or contract.

4.1. The basis for the protest shall be limited to the following grounds:

(a) the designated operator's inability to timely, efficiently, effectively, and economically develop the drilling unit,

(b) failure by the designated owner to satisfy any of the required criteria for designation of an operator as set forth in R649-2-4; or

(c) a non-applicant working interest owner who can demonstrate good cause for drilling an alternate well.

4.2. Upon the timely filing of a request for agency action protesting an approved APD, the approved APD and any actions related to preparation for drilling shall be stayed pending resolution by the board.

4.3. Any activity commenced after the an approved APD has been electronically posted by the division but before the ten calendar day period has expired, will not constitute a violation of the APD, but will be at the designated operator's sole risk and expense, shall not confer any implied or express rights with respect to operatorship designation, and shall not be deemed preparation for drilling purposes of Section R649-2-4.

5. In the absence of a JOA, or when a JOA is imposed by the board pursuant to Section 40-6-6.5(2), and when good cause exists, an owner may file a request for agency action seeking board approval to drill a proposed well when the designated operator has refused to file an APD or drill the proposed well. If the request for agency action is granted by the board, the division may then approve an APD submitted by the non-designated operator owner if the division finds the APD to be complete and otherwise filed in accordance with the rules of the division and orders of the board.

6. A well will be assigned an API number by the division. The API number should be used to identify the permitted well in any future correspondence with the division. Unless otherwise revoked, approval of the APD shall be valid for a period of twelve months from the date the APD was electronically posted on the division's website.

7. If a change of well location or drilling program is desired, an amended APD shall be timely filed with the division and its approval obtained before preparation for drilling occurs at the alternate location. If the APD has already been approved, the requested change should be submitted via sundry notice and approved through the division's ePermit system.

8. After a well has been completed or plugged and abandoned, it shall not be reentered without the operator first submitting a new APD and obtaining the division's approval. The division will grant approval if the designated operator provides evidence that the appropriate bond has been furnished or waived, as required by Section R649-3-1, and the contemplated work or operations is not in violation of any rule or order of the board.

9. A designated operator who applies for an APD in an area not subject to an order of the board establishing a drilling unit, may contemporaneously or subsequently file a request for agency action to establish a drilling unit for the subject area not to exceed the area reasonably projected by the operator or owner to be underlaid by the targeted reservoir.

10. Any application for an APD and any actions related to preparation for drilling shall be stayed pending final determination of any request for agency action filed by an interested person, when the request is the establishment of a drilling unit or for the modification of existing drilling units for the spacing of wells.

11. If the other conditions required for a completed APD have been fulfilled, an exception to Subsection R649-3-4(10) shall be made and an APD shall be approved by the division if the designated operator files a self-certification, evidenced by an affidavit or declaration in conformity with Section 78B-18a-101, et seq., demonstrating that on or after the date the request for agency action:

(i) the designated operator has the right or obligation under the terms of an existing contract to drill the requested well; or

(ii) the owner or designated operator has a leasehold estate or right to acquire a leasehold estate under a contract that will be terminated unless they are permitted to commence the drilling of the required well before the matter can be fully heard and determined by the board.

Utah Admin. Code R649-3-4

Amended by Utah State Bulletin Number 2020-15, effective 7/27/2020