tcï t I 2017 oil and Gas Board of Mississippi to enter an order amending the Speciat Field Rules of

Transcription

1 BE*..RE rr{e srar' orl Ar{Þ GAs E'ARÐ ou. Mrssrss,'JillED FOR RECOI Re Amendment of Speciat Field Rules ofprairie Bra ch FieId Ðocket ISo Ot Z-D tcï t I 2017 STATE OILAND GAS BOAI LISA IVSHIN, SUPERVISC Order No. 5L5-2O17 ORDÞR, This cause came on to be heard on the Petition of Signal, LLC requesting the State oil and Gas Board of Mississippi to enter an order amending the Speciat Field Rules of Prairie Branch Field to define the Ha mesviile Oil Pool, to adopt spacing rutres for t11e field, to authorize increased densitywells in the Ha mesvi1le Oil Pool, to auttrorize comrningled. storage of production ar1d granting related relief. This Board, having considered the Petition and the evidence submitted. in support thereof, and beíng fultry advised in the premises, is of the opinion and find.s tlat the relief requested by Signal, LLC shouid be and the same is hereby granted. This Board further finds and d.etermines as follows, towit: I Due, proper and iegal notice of the meeting of ttris Board íor the purpose of considering alld hearing the Petition ûled herein has been given in the marìner and time provided by law and the rules and regulations of this Board. Due, legal and sufücient proofs of publication of such notice and proof of notice by personal service are on flle with this Board- Signal, LLC has made a reasonably diligent effort to give the personal notice required by the statutes of the State of Mississippi and the rules and regulations of this Board. This Board has full jurisdiction of the parties and the subject matter hereof. 2 A public hearing was held by this Board in Sui.te E, 5OO Gre rmont Avenue, Jackson, Mississippi, comaencing on Septembet 2O,2017, at 1O:OO o'clock a.rn., at which time and place all persons who desired to be heard on said matter \Mere heard a'd ali testimony and evidence presented were duly considered by this Boa d. Signal, LLC \Mas represented at the hearing by its attorney James M. Nix. No ot-irer parties made a r appea-rance at the hearing of this matter. J Signal, LLC is a Mississippi iimited liability comparry, whose address is 4273I-SS North' Suite 1-4, Jackson, Mississippi Signal, LLC is the operator of all unplugged wells in Prairie Branch Field in clarke county, Mississippi. 1-

2 Special Fieid Rules were adopted by this Board for Prairie Branch Field in LSTI pursuant to Order No The Masonite - F.L.B No. 1 \Mell (API No \ and ttre Masonite Unit No. 2 Well (API No ) currently are completed in the Ha5nresville Oil Pool The Special Fieid Rules as set forth in Order No define the Smackover Oil Pool and the Norphlet Oil Pooi, but do not define the Haynesville Oil pooi. Said. Special Field Ruies should be amended to define the Haynesville Oil Pool as follows, to-wit: "The Ha5mesviile Oil Pool in Prairie Branch Field shali be construed to mean those strata of the Ha mesviile Formation prod.uctive of oil in the interval between 12,879 feet to 13,830 feet, electric log depth, in the Inexco Oil Company - Masonite Well No. 1 located in the North Half of the Southwest Quarter (N% of SW%) of Section 15 of Township 1 North, Range 14 East, Clarke County, Mississippi, as indicated on the electric log of said weil and al1 intervals correlative of said strata productive of hydrocarbons." 7. In order to economically and efficiently recover the reserves in the Haynesville OiI Pool, it is necessarsr that up to two (2) wells be authorized to simultaneously produce from said pool in each 80-acre unit in Prairie Branch Field. The Special Field Rules should be amended to authorize the drilling, completion and simultaneous prod.uction of up to two (2) wells in the Ha mesville Oil Pool on each unit with all wells on each such unit being entittred to a single combined unit allowable. The Speci.al Field Rules should be further arnended to provide that there shall be no required minimum distance between increased density wells in the Ha mesvilie Oil Pool on each unit. 6 B. Spacing rltles should be established in the amended Special Field Rules for the Haynesville Oi1Pool, the Smackover Oil Pool and the Norphlet Oil Pool as fotrlows, to-wit: ",{. Spacing for weils that are driiled to test and produce the FIaynesville Oi1 Pool, the Smackover Cil Pool and the Norphlet Oii Pool shall" be according to foliowing spacing rules, except as otherwise provided below in paragraph B for increased density weltrs in the Haynesviltre Oil Pool: (1) Each drilling unit shall consist of eighty (8O) contiglrolrs surface acres, or two (2) contiguous governmental quarter-quarter sections containing not less than seventy-two (72) surface acres nor rnore than eighty-eight (BB) surface acres, upon which no other driiling or producibie weil in the sarne pool is located. The word 'contiguous' as used herein shall mearr bordering each other at more than one point. -2-

3 (2),A'ny drilling unit not composed of two (2) contiguous governmental quarter-quarter sections must be completely encomþassed by the perimeter of a rectangle 16OO feet by ZìZS teet. (3) No unit shall be permitted which will create island acreage. (4) Each weil shall be located at least 500 feet from every exterior boundary of the driliing unit. "8. up to two (2) welis may be drilled to, completed in and simultaneously produce from the Haynesviltre Oii Pool on éach unit with all wells on each such unit being entitled to a single cornbined unit allowable. There shall be no required rninimum distance between increased. density wel1s in the Halmesville Oil Pool on each such unit." In order to minimize tfte economic costs and environmental disturbances, it is necessað that the Special Field Rules should be amended so as to allow the comminglrng of production from wells within each separate unit in a common storage system. The following commingling and measurement of production rules should be adopted by this Board for Prairie Branch Field, to-wit: "The operator of each producing weil shall maintain proper separators and stock tanks and/or metering devices and such connèctions thereto as are necessar r to continuously measure the total production from each producing well. \Àrhere metering devices are used, ãs herein provided, the production may be commingled with production from other wells and"/ or other units into a common storage system. If, upon a sale therefrom a variance exists between the measurement from the comrnon storage system and the total measurement of the production of all the wells commingled in such comm.on storage system, then such variance shall be allocãted. back to each of the wells producing into such common storage system proportionately to the production measured from each well." 10. It is necessary that tl.e existing Special Fieid Rules for Prairie Branch Field. be amended as set forth below so as to increase the ultimate recovery of hyd.rocarbons from the various productive pools in Prairie Branch Field. The arnendrnent of ttre Special Field Ruies for Prairie Branch Field as set forth belowwill promote the conservation of oil and gas of Prairie Branch Fieid by preventing waste and safeguard.ing, protecting a d enforcing the co-equal and correlative rights of all o\ã/rrers of hydrocarbons in the field to the extent that each such o\ã/ner may recover his fair and equitable share of recoverable hydrocarbons without u.nnecessaij expense. Furtherr rore, the a nendment of the Special Field Ruies for Prairie Branch Field as set forth belowwill foster, encourage and promote the full development of ttre freld. 9 it IS THEREFORE ORDERED AND ADJUDGED by t1.e State Oil and Gas Board of Mississippi that the relief requested by Signal, LLC in t]:.e Petition filed in this docket

4 should be, and the same is hereby, granted and it is ordered that the Special Field Rules as set forth herein shoul.d be, and the sarne are hereby, amend"ed to read as follows, towit: SPECIAL FIELÐ RT'LES PRAIRIE BRJTNCI{ FTELD CLARKE COUNTY, MISSTSSIPPT The following special field rules shatl apply to wells drilled in prairie Branch Field as hereinafter defined: FTEID AREA The Prairie Branch Fieid as herein used is defined as that area located in ttre South Hatf (S%) of Section 9, all of Section 15, the North Half (N%) of Section 16 and the North Half (N7z) of Section 22,{in Township 1 North, Range 14 East, Clarke Count r, Mississippi, underlain by the pools herein defined and all productive extensions thereof. POOI, DEFINITIOI{S The S nackover Oil Pool in Prairie Branch Field shatl be construed. to mea-n those strata of the Smackover Formation productive of oi1 in the interval between 13,831 feet to 14,000 feet, electric log depth, in the Inexco Oil Company - Masonite'WellNo. 1 located in the North Half of the South"west Quarter (N% of SV/%) of Section 15 of Township 1 North, Range 14 East, Clarke County, Mississippi, as ind.icated on the electric log of said well and ali intervals correlative of said strata productive of hyd.rocarbons. The Norphlet CIil Pool in Prajrie Branch Field shali be construed to mean those strata of tlre Norphlet Formation productive of oil in the interval between 1,4,668 feet to 14,BOB feet, electric log depth, in the Inexco Oil Company - Masonite \ivellno. 1 located in tlle North Half of the Southwest Quarter (N% of SW7+) of Section 15 of Township 1 North, Range 14 East, Clarke Count5r, Mississippi, as indicated on the electric log of said well and all intervals correlative of said strata productive of hydrocarbons. RULE 1.- SPACTT{G OF U'ET,LS The characteristics of the oil pools defined above in these Special Field Rules are such that wells located in conformance with the spacing rules hereinafter set forth will effi.cientiy drain and produce the recoverabie oii from each said pool without avoidable waste A. Spacing for wells that are driltred to test and produce the Ha5rnesville Oil Pool, the Smackover Oil Pool and the Norphiet Oi1 Pool sha1l be according to following spacing rules, except as otherwise provided below in paragraph B for increased density wells in the Ha5mesvilie Oil Pool: (1) Each drilling unit shall consist of eighty {8O) contiguous surface acres, or two (2) contiguous goveínmental quarter-qu arter sections containing not less than seventy-two (72J surface acres nor more than eighty-eight (88) surface acres, upon which no other drilling or producible well in the same pool is located. The word "contiguoì.ts" as used herein shall mearr bordering each other at more than one point. The Ï{aynesvíl1e OÍ1 Pool in Prairie Branch Fieid. shall be construed to mean those strata of the FIaynesville Formation productive of oil in the interval between I2,BTg feet to 13,830 feet, electric 1og depth, in the Inexco Oil Company - Masonite WellNo. 1 located in the North Half of ttre Southwest Quarter (N7z of SWZ of Section 15 of Township 1 North, Range 14 East, Ciarke Count5r, Mississippi, as indicated on the electric log of sãid well and all intervals correlative of said strata productive of hyd.rocarbons- -4-

5 (2) Any drilling uni.t not composed of two (21 contiguous governmental quarter-quarler sections must be completely encompassedly the perimeter of a rectangle 1600 feet by 2T2S feet. (3) No unit shall be perrnitted which will create i.sland acreage. (4) Each weli shall be located at least 5oO feet frone every exterior boundar5r of the drilling unit. to two (2) wells may be drilled to, completed in and sirnultaneously produce P' from the -Up HaSmesville oil Pool on each unitwith aiîwefls on each such unit being to entitled a single combined unit aliowable. There shall be no required rninimum distance between i:rcreased density wells in the Haynesville Oil pool oä each such unit- The operator of esch producing well shall maintain proper separators and stock tanks and/or metering devices and such connections thereio as are necessar5 to continuously measure the total production from each prod.ucing well. Where metäring devices arä ""-.-d, as herein provided, the production maybe commingledwith production from other welis and/or other units into a coïnmon storage system. if, upãn a sale therefrom a variance exists between the measurement fro* th. common storage system and the total measurement of the production of al.l the wells commingled in ãr"l common storage systern, then such variance shall be allocated back to eaãh of the wells prod.ucing inîo such coílmon storage systemproportionatelyto the productionmeasuredfrom eachwell. R.UT.E 3 -- APPLICAtsILITY OF SÎATEUTIDE RIT'LES All rules and regulations contained in Statewide Order No and all amendments thereto, not specifically covered in the foregoing Special Field Rules are hereby adopted a d shall apply to said field. The Board expressly reserves the right, after notice and hearing, to alter, a:rrend or repeal any and al1 of the foregoing rules and regulations. --- end of Specía.l Field Ruies --- ITiS FURTHÐRORDERED AND ADJUDGED thatthis Order shallbe effectivefrorn and after September 20,2OIT. SO ORDERED AND ADJUDGED on this the -7- Qd, day of a 2017 B By: â Prepared and submitted by: James M. Nix JONES AND NIX, PLLC 2 Country Place Pearl, Mississippi Phone (601)