PURPOSE: In the early history of oil drilling and production, a landowner or lessee could drill as many wells on his/her land as s/he desired and as close to the lease boundaries as possible. S/he could also produce oil as rapidly as possible from each well to prevent loss of the oil to his/her neighbors. This resulted in many unnecessary wells being drilled and premature depletion of oil pools. As more knowledge of reservoir behavior and the mobility of reservoir fluids increased, spacing of wells on a wider, uniform pattern became a standard practice. Optimum spacing is considered to be the maximum number of reservoir acres that can be economically and effectively drained by one well within a reasonable time. Stated differently, if one well can be drilled economically on forty acres and this is the area that can be drained effectively, then the spacing or acreage attributable to the well should not be less than forty acres. The word effective implies that a well so spaced will ultimately recover as much oil for the forty acres as would be recovered by more than one well. This rule provides requirements for, and limitations on, the spacing of wells and for certain exceptions and exemptions thereto.

1. (1) In the absence of an order by the council setting spacing units for a pool, the following regulations shall apply:

   1. (A) For the purpose of interpreting distance requirements of this rule, any hole drilled on a lease shall be considered a well until properly abandoned;

   2. (B) Oil Wells.

      1. 1. Not more than one (1) well drilled for

oil shall be drilled upon any tract of land other than a governmental quarter section or governmental lot corresponding thereto, or, in areas not covered by United States Public Land Surveys, an arbitrarily designated forty (40)-acre tract. The well shall not be located closer than approximately five hundred feet (500') to any boundary line of a governmental quarter quarter section, governmental lot corresponding thereto, or arbitrarily designated forty (40)-acre tract, nor closer than approximately one thousand feet (1000') to the nearest well drilling to or capable of producing from the same pool on the same lease or unit. Should the governmental quarter quarter section, governmental lot, or arbitrarily designated tract contain less than thirtysix (36) acres, no well shall be drilled thereon except by special order of the council; and

1. 2. Wells whose oil-producing formations

may be reasonably expected to be less than one thousand two hundred feet (1200') in depth may be excepted from the forty (40)- acre spacing requirement at the discretion of the council. Any well so excepted shall not be drilled closer than approximately one hundred sixty-five feet (165') to lease, boundary or property line;

1. (C) Gas Wells.

   1. 1. Not more than one (1) well shall be

drilled for gas upon any tract of land other than a governmental section or, in areas not covered by United States Public Land Surveys an arbitrarily designated six hundred forty (640)-acre tract. The wells shall not be located closer than the approximately two thousand two hundred feet (2200') to any boundary line of a governmental section or arbitrarily designated six hundred forty (640)- acre tract, nor closer than approximately four thousand five hundred feet (4500') to the nearest well drilling to or capable of producing from the same pool on the same lease or unit. Should the governmental section or arbitrarily designated tract contain less than six hundred (600) acres, no well shall be drilled thereon except by special order of the council; and

1. 2. Wells whose gas-producing forma-

tions may be reasonably expected to be less than one thousand five hundred feet (1500') in depth may be excepted from the six hundred forty (640)-acre spacing requirement at the discretion of the council. No well shall be drilled closer than approximately two hundred thirty-four feet (234') from lease, boundary or property line;

1. (D) Spacing and lease-line requirements may be waived, upon application to the state geologist, to protect against offset drainage in the event offset wells were drilled prior to the enactment of chapter 259, RSMo;
2. (E) Project Development. Spacing requirements may be waived, at the discretion of the council, for all wells required in research or development projects leading to initiation or improvement of methods for the economic recovery of oil or gas by primary, secondary or tertiary processes (see 10 CSR 50-2.110 for procedure);
3. (F) Wells drilled expressly for operation of underground gas storage projects are exempt from spacing requirements. No well shall be drilled closer than approximately three hundred thirty feet (330') to a lease line without written authorization of the state geologist; and

4. (G) Noncommercial gas wells may be exempted from the spacing requirements of paragraph (1)(C)1. of this rule, after approval by the state geologist, where the following procedures and conditions are met:

   1. 1. In areas where no previous spacing

patterns have been established, an owner having acquired drilling rights may apply for the establishment of a drilling unit containing no less than three (3) acres, consisting of one (1) or more contiguous separately owned tracts, on which a well no deeper than eight hundred feet (800') in depth may be drilled without regard to section lines or property lines; provided that any well so permitted shall not be drilled closer than one hundred sixty-five feet (165') from the boundary of the drilling unit or a closer distance as is allowed under subsection (1)(D) of this rule;

1. 2. An applicant for an exemption and

establishment of a drilling unit under this subsection shall file a plat or well location map (see 10 CSR 50-2.030(2)) outlining the area which will be affected by the proposed well, and showing the location of the separate tracts along with the names and addresses of the mineral and surface owners of record, as well as names and addresses of lessees of any tracts leased for oil and gas. All wells, including dry, abandoned, producing or drilling wells on the proposed unit, and any well location for which drilling permits have been approved, shall be accurately located and designated on the plat. The applicant shall also file proof that s/he has the right to take gas from beneath all land in the proposed unit; and

1. 3. Spacing exemptions may be granted

for good cause upon application to the council; and

1. 4. A well drilled under the terms of this

provision shall be subject to all other applicable provisions of the rules of the Oil and Gas Council, except that the bonding amount shall be the greater of one dollar and fifty cents ($1.50) per well foot or three hundred dollars ($300).

AUTHORITY: sections 259.060, 259.070 and 259.100, RSMo 1986.* Original rule filed Oct. 11, 1966, effective Oct. 21, 1966. Amended: Filed Sept. 12, 1973, effective Sept. 22, 1973. Amended: Filed Sept. 12, 1978, effective Feb. 1, 1979. Amended: Filed Dec. 15, 1986, effective April 11, 1987. Amended: Filed May 18, 1987, effective July 24, 1987. *Original authority: 259.060, RSMo 1965, amended 1972; 259.070, RSMo 1965 amended 1972, 1983, 1987; and 259.1000, RSMo 1965, amended 1987.