1. (a) Definitions.

   1. (1)

      1. (A) “Deepen” for a cased well means an operation whereby a well is drilled to a measured depth below the cement casing shoe.
      2. (B) For an open hole completion, “deepen” means an operation whereby a well is drilled below the original measured depth of the well;
   2. (2) “Drill” means the commencement of an operation to either set conductor pipe or the moving in a drilling rig capable of drilling to a depth to set the requisite amount of surface casing and spudding the well, if conductor pipe is not used;
   3. (3) “Permit holder” means the person to whom the permit is issued and is responsible for all regulatory requirements relative to the production well;

   4. (4) “Production well” means a well drilled, deepened, or reentered after plugging, for:

      1. (A) The exploration or production of oil and/or gas or brine; or
      2. (B) A water supply for use in connection with an enhanced oil recovery project;
   5. (5) “Reenter” means an operation whereby access to a previously plugged wellbore is reestablished for any purpose including replugging;

   6. (6)

      1. (A) “Shale operations” means drilling activities relating to the production of gas and other petroleum hydrocarbons directed at an unconventional shale gas formation in a county listed in 15 CAR § 275-230(c) or 15 CAR § 275-230(d).
      2. (B) “Shale operations” does not include:

2. (i) The periodic inspection, maintenance, or repair of completion activities;

   1. (ii) Preparatory activities such as inspection, surveying, or staking; or

      1. (iii) Drilling additional wells, redrilling, or recompletion operations on an existing drilling pad if the operator does not expand the existing pad.
      2. (C) For purposes of this section, shale operations does include well site construction operations; and
   2. (7) “Spud” means the commencement of drilling a wellbore to a depth to set the requisite amount of surface casing.

3. (b) Permit application procedures for a permit to drill, deepen, or reenter a production well.

   1. (1)

      1. (A) No person shall drill, deepen, or reenter a plugged production well without a permit.
      2. (B) A copy of the permit shall be posted on site prior to a well being spud or the commencement of deepening or reentering operations.

   2. (2)

      1. (A) The permit holder is required to provide notice to the surface owner in accordance with Arkansas Code § 15-72-203.

      2. (B) If notice is required in accordance with Arkansas Code § 15-72-203(c) and entry upon the surface owner’s surface estate is required on or after the effective date of this rule, the notice shall contain:

         1. (i) The proposed date shale operations will commence;
         2. (ii) The location of the proposed well and the pad location, including the section, township, range, and plat of the pad location, if available;
         3. (iii) A statement that the:
4. (a) (a) Permit holder has a pending or approved drilling permit for the proposed shale operations on the surface owner's property; and

5. (b) (b) Permit shall be available for inspection by the surface owner on request by the surface owner; and

   1. (iv) The name, address, telephone number, fax number, and electronic mailing address of the permit holder or the permit holder’s agent.

      1. (C) The notice shall be sent by certified United States Postal Service or delivered personally to the surface owner at the address of the surface owner stated in the public records of the county collector of the county in which the surface owner’s property is located at least fourteen (14) days before the permit holder proposes to begin shale operations on the surface owner’s property.
      2. (D) After written notice of the permit holder’s intent to begin shale operations is given under this subsection, a permit holder is not required to give any other notice to begin, conduct, or complete shale operations on the surface owner’s property.

      3. (E) Written notice under this subsection is:

         1. (i) Presumed delivered three (3) days after mailing by certified mail; or
         2. (ii) Effective immediately upon hand delivery.

      4. (F) Written notice is not required:

         1. (i) For emergency situations in which the shale operations are required to protect the public health and safety or the environment; or
         2. (ii) If a surface owner has a contractual relationship with a permit holder or the permit holder’s agent that specifies when or how the permit holder shall give notice regarding the beginning of shale operations.
      5. (G) After receipt of a written notice of the permit holder’s intent to begin shale operations under this subsection, the surface owner shall not make alterations to a proposed drilling location to interfere with the shale operations for which the surface owner received the notice.
      6. (H) The provisions of subdivisions (b)(2)(A) — (F) of this section, above, do not supersede, modify, or supplant the notice provisions of 15 CAR § 275-229.

   2. (3)

      1. (A) The permit holder shall notify the appropriate Oil and Gas Commission regional office by telephone or other approved method a minimum of twenty-four (24) hours prior to a well being spud or the commencement of deepening or reentering operations.
      2. (B) Commission staff may conduct site inspections as deemed necessary.

   3. (4)

      1. (A) No production well may be drilled at a surface location other than that specified on the permit, except that if a permit holder has commenced drilling operations and the production well is lost due to adverse drilling conditions prior to surface casing being set, the permit holder may request an amendment of the permit without a fee for the new location, provided the production well remains on the same surface owners’ property where the production well was originally permitted.
      2. (B) The Director of Production and Conservation may approve the commencement of drilling operations prior to the filing of an amended permit.
      3. (C) Movement of the production well location off the original surface owners’ property, or after surface casing has been set, requires the filing of a new permit application, along with a new permit fee and plat.
      4. (D) Drilling may not commence prior to the issuance of a new permit.

   4. (5)

      1. (A) Application for a permit to drill, deepen, or reenter a plugged production well shall be made on forms prescribed by the director.

      2. (B)

         1. (i) The application shall be executed under penalties of perjury accompanied by a nonrefundable permit fee of three hundred dollars ($300).
         2. (ii) The permit shall not be issued until any required financial assurance in accordance with 15 CAR § 275-202 is submitted and approved.

   5. (6)

      1. (A) If the application does not contain all of the required information or required documents, the director or his or her designee shall notify the applicant in writing.

      2. (B) The notification shall:

         1. (i) Specify the additional information or documents necessary for an evaluation of the application; and
         2. (ii) Advise the applicant that the application will be deemed denied unless the information or documents are received within sixty (60) days following the date of mailing or personal delivery of the notification.
   6. (7) Permits shall automatically expire six (6) months from the date of issuance, unless commencement of the drilling, deepening, or reentry of plugged production well operations authorized by the permit has occurred, which are to be continued with due diligence, but not to exceed one (1) year from the date of commencement of the drilling, deepening, or reentry of plugged production well operations authorized by the permit, at which time the production well shall be plugged or a new permit application, along with a new permit fee and plat, must be filed.

   7. (8)

      1. (A) Permits for the drilling, deepening, or reentry of a plugged production well are not transferable prior to the completion of drilling operations and the setting of surface casing.
      2. (B) A new permit application, along with a new permit fee and plat must be filed.

   8. (9) The permit application to drill, deepen, or reenter a plugged production well shall include at a minimum:

      1. (A) The proposed name of the production well;

      2. (B)

         1. (i) The surveyed location and ground elevation of the production well.
         2. (ii) A survey is not required for a deepened production well or a reentered plugged production well if the original production well location was surveyed and shown on the original production well permit application.
         3. (iii) If the application is for a horizontal production well, the surface location and proposed bottom hole location of the lateral portion of the horizontal production well shall be shown.
         4. (iv) If applicable, a Form 25 must be submitted for horizontal production wells where the costs and production are to be shared between drilling units in accordance with 15 CAR § 275-230 or 15 CAR § 275-231, or a Form 5 must be submitted for a location exception in accordance with 15 CAR § 275-227;

      3. (C) A plat showing:

         1. (i) The exact location of the production well proposed to be drilled, deepened, or reentered;
         2. (ii) An outline of the proposed drilling unit and/or leasehold, whichever is applicable, unless the production well is a wildcat well;
         3. (iii) The distance from the production well to the nearest section lines, drilling unit lines, and/or lease lines, whichever is applicable; and
         4. (iv) If the production well is located within a controlled oil or gas field, the plat shall also include the location of all producing wells completed or producing within the same common source of supply in the drilling unit and/or leasehold;
      4. (D) The name of the proposed drilling contractor;
      5. (E) The proposed depth of the production well; and
      6. (F) The name of the deepest geologic formation to be tested.
   9. (10) The application for a permit to drill, deepen, or reenter a plugged production well shall be signed by a person authorized to sign for such owner as specified on the organizational report filed in accordance with 15 CAR § 275-212.
   10. (11) The applicant must be authorized to do business in the State or Arkansas, and by filing an application, the applicant irrevocably waives, to the fullest extent permitted by law, any objection to a hearing before the commission.

   11. (12) If the applicant satisfies the requirements of all applicable statutes and this section, a permit shall be issued, and in no circumstances be unduly withheld, unless:

       1. (A) The applicant has falsified or otherwise misstated any material information on or relative to the permit application; or

       2. (B) No further permits or authorities may be issued in accordance with 15 CAR § 275-104.

          1. (c) Production well drilling permit revocation procedure.

   12. (1) The director may revoke a production well drilling permit if the:

       1. (A) Permit holder fails to meet permit conditions as specified in the production well drilling permit;
       2. (B) Production well permit was issued in error; or
       3. (C) Permit holder falsified or otherwise misstated any material information in the application form.

   13. (2)

       1. (A) The director shall notify the permit holder of the production well drilling permit in writing.
       2. (B) Following the revocation notice, the permit holder is required to plug the production well.

       3. (C)

          1. (i) The permit holder shall have thirty (30) days from the date of the production well drilling permit to appeal the director’s decision to revoke the production well drilling permit in accordance with 15 CAR §§ 275-101 and 275-102, and other applicable hearing procedures.
          2. (ii) Drilling or production may not commence or continue during the appeal process.
       4. (D) A revocation of a production well drilling permit for which an appeal has not been filed shall become a final administrative decision of the commission thirty (30) days following the date of the revocation.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Source: 1992 rule book; amended July 29, 2011; amended January 20, 2014)"