1. (a) A permit holder may elect to complete a well in such a manner as to permit the production of oil or gas from one (1) formation through the tubing and oil or gas from a separate formation through the annular space between the tubing and casing, subject to the following conditions, that:

   1. (1) Each well dually completed shall be regarded as a separate and distinct well;
   2. (2) The production shall be taken and measured separately; and
   3. (3) All rules and orders governing individual oil or gas wells shall be strictly adhered to.

2. (b) A permit holder may file an application with the Director of Production and Conservation to complete a gas well for production of dry gas from a formation through the annular space between the production casing and the surface casing, provided the following conditions are met:

   1. (1) Each application shall be made on a form prescribed by the director and shall include:

      1. (A) Proof of written notice to all offset operators or owners, as defined in Arkansas Code § 15-72-109, in governmental sections that are contiguous to the lease upon which uncontrolled gas is to be produced; or
      2. (B) If controlled, then proof to all offset operators or owners, as defined in Arkansas Code § 15-72-109, having the right to produce from the same shallow formation in the adjacent governmental sections;
   2. (2) Surface casing in the subject well has been set and cemented to a depth as required by 15 CAR § 275-213; and
   3. (3) The proposed zone to be produced would otherwise not be economic due to limited production potential.
3. (c) Any offset operator or owner noticed in accordance with subdivision (b)(1) of this section, above, shall have the right to object to the granting of such application within fifteen (15) days after receipt of the application by the Oil and Gas Commission.

4. (d)

   1. (1) If an objection is received within fifteen (15) days after receipt of the application by the commission, or if the permit holder does not satisfy all requirements of subsection (b) of this section, the application shall be denied.
   2. (2) If an application is denied, the permit holder may request to have the matter placed, in accordance with established procedures, on the docket of a regularly scheduled commission hearing.
5. (e) If no objection is received by the commission within fifteen (15) days after receipt of the application by the commission, and the permit holder is in compliance with all requirements of subsection (b) of this section, the application shall be approved.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "(Source: 1992 rule book; amended December 16, 2007)"