16 Tex. Admin. Code § 3.5 – Application To Drill, Deepen, Reenter, or Plug Back

(a) Permit requirements for spacing, density, and units. An application for a permit to drill, deepen, plug back, or reenter any oil well, gas well, or geothermal resource well shall be made under the provisions of §§3.37, 3.38, 3.39, and/or 3.40 of this title (relating to Statewide Spacing Rule; Well Densities; Proration and Drilling Units: Contiguity of Acreage and Exception Thereto; and Assignment of Acreage to Pooled Development and Proration Units) (Statewide Rules 37, 38, 39, and 40), or as an exception thereto, or under special rules governing any particular oil, gas, or geothermal resource field or as an exception thereto and filed with the commission on a form approved by the commission. An application must be accompanied by any relevant information, form, or certification required by the Railroad Commission or a commission representative necessary to determine compliance with this rule and state law.
(b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
1. (1) Application--Request by an organization on the appropriate form for a permit to drill, deepen, plug back, or reenter any oil well, gas well, or geothermal resource well.
2. (2) Commission--The Railroad Commission of Texas.
3. (3) Commission representative--A commission employee authorized to act for the commission. Any authority given to a commission representative is also retained by the commission. Any action taken by the commission representative is subject to review by the commission.
4. (4) Organization--Any person, firm, partnership, joint stock association, corporation, or other organization, domestic or foreign, operating wholly or partially within this state, acting as principal or agent for another, for the purpose of performing operations within the jurisdiction of the commission.
5. (5) Outstanding final order--Either a commission order against an organization finding that the organization has committed a violation and all appeals have been exhausted or an agreed order entered into by the commission and an organization relating to an alleged violation, where:
  1. (A) the conditions that constituted the violation or alleged violation have not been corrected;
  2. (B) all administrative, civil, and criminal penalties, if any, relating to the violation or agreed settlement relating to an alleged violation have not been paid; or
  3. (C) all reimbursements of costs and expenses, if any, assessed by the commission relating to the violation or to the alleged violation have not been collected.
6. (6) Position of ownership or control--A person holds a position of ownership or control in an organization if the person is:
  1. (A) an officer or director of the organization;
  2. (B) a general partner of the organization;
  3. (C) the owner of an organization which is a sole proprietorship;
  4. (D) the owner of more than a 25% ownership interest in the organization; or
  5. (E) the designated trustee of the organization.
7. (7) Violation--Noncompliance with the Texas Natural Resources Code, Title 3, or a commission rule, order, license, permit, or certificate relating to safety or the prevention or control of pollution.
(c) Organization eligibility to file an application. The commission may not accept an application from an organization, if within the five years preceding the date on which the application is filed:
1. (1) the applicant organization has any outstanding final orders against it; or
2. (2) any person holding a position of ownership or control in the applicant organization also has held a position of ownership or control in any organization, including the applicant organization, registered with the commission that has an outstanding final order against it relating to a violation during that period of ownership or control.
(d) Compliance certification.
1. (1) The commission or a commission representative may require an applicant organization to file a compliance certification. The certification shall include a statement that within the last five years:
  1. (A) the applicant organization has no outstanding final orders against it; and
  2. (B) no person in a position of ownership or control of the applicant organization has held a position of ownership or control in any organization, including the named organization, that has an outstanding final order against it relating to a violation during that period of ownership or control.
2. (2) Failure to file a required certification will delay or prevent approval of the application. Knowingly filing a false certification may be a violation of the Texas Natural Resources Code, §91.143, and may also subject a permit to denial or revocation. A permit that is issued on the basis of a certification statement that is later determined to be incorrect is also subject to revocation.
3. (3) If the certification is signed by an agent of an applicant organization, the certification is binding on the agent and the organization as if signed by a person holding a position of ownership or control in the organization.
(e) Commencement of operations. Operations of drilling, deepening, plugging back, or reentering shall not be commenced until the permit has been granted by the commission and the waiting period, if any, has terminated, or authorization has been granted pursuant to subsection (f) of this section.
(f) Testing of existing wells in other reservoirs inside the casing. For an existing well, an operator may request authorization to commence operations to deepen inside the casing or plug back prior to the granting of a permit to deepen or plug back.
1. (1) This authorization shall be requested by filing with the district office a letter of intent to deepen inside the casing or plug back. The letter shall include:
  1. (A) the operator name;
  2. (B) the lease name;
  3. (C) the lease number or gas identification number;
  4. (D) well number;
  5. (E) county;
  6. (F) field name;
  7. (G) a list of all reservoir(s) to be tested;
  8. (H) the casing setting depth and the depth of the deepest reservoir to be tested;
  9. (I) a plat showing the well location; and
  10. (J) a statement as to whether or not the well location would require an exception to §§3.37, 3.38, 3.39, and/or 3.40 of this title (relating to Statewide Spacing Rule; Well Densities; Proration and Drilling Units: Contiguity of Acreage and Exception Thereto; and Assignment of Acreage to Pooled Development and Proration Units) (Statewide Rules 37, 38, 39, and 40) if completed in any of the reservoirs to be tested. If an exception would be required, the letter of intent shall also include a statement that all affected offsets have been given written notice of the intent to test with the opportunity to witness the testing and the offsets shall be identified on the plat.
2. (2) Operations of deepening inside the casing or plugging back shall not be commenced until the district office has reviewed and signed the letter of intent. Testing pursuant to this authorization shall be completed within 90 days from the date the district office signs the letter of intent.
  1. (A) No reservoir tested pursuant to the provisions of this subsection shall be tested for more than 15 days.
  2. (B) If the operator desires to place the well on production, the operator shall shut in the well, with no production being sold, and file a permit application for the tested reservoirs with the appropriate fees. If the permit application for the tested reservoirs requires an exception to §§3.37, 3.38, 3.39, and/or 3.40 of this title (relating to Statewide Spacing Rule; Well Densities; Proration and Drilling Units: Contiguity of Acreage and Exception Thereto; and Assignment of Acreage to Pooled Development and Proration Units) (Statewide Rules 37, 38, 39, and 40), no consideration will be given by the commission to the cost of recompleting and testing the well in determining whether or not to grant the exception.
  3. (C) Within 30 days of completion of testing, the operator must either file an application for a permit to produce a reservoir tested pursuant to this subsection or file an amended completion report in accordance with §3.16 of this title (relating to Log and Completion of Plugging Report) (Statewide Rule 16) with a copy of the intent to test signed by the district office and a statement that a permit to produce a tested reservoir is not being sought, or if the well has been plugged and abandoned, a plugging report including reservoir and perforation data. If a permit is not obtained for the tested reservoirs and/or an allowable is not assigned, the producer shall report all test production in the producer's monthly report filed for the last permitted reservoir in which the well was completed and may request authorization to sell the test production. The test production may be sold after such authorization is granted.
(g) Exploratory and specialty wells. An application for any exploratory well or cathodic protection well that penetrates the base of the fresh water strata, fluid injection well, injection water source well, disposal well, brine solution mining well, or underground hydrocarbon storage well shall be made and filed with the commission on a form approved by the commission. Operations for drilling, deepening, plugging back, or reentering shall not be commenced until the permit has been granted by the commission. For an exploratory well, an exception to filing such form prior to commencing operations may be obtained if an application for a core hole test is filed with the commission.
(h) Exception permits. If an application for a permit presents a question of an exception to the applicable density rule as well as an exception to the spacing rule, the operator seeking a spacing and density exception must obtain such an exception as required under the applicable spacing and density rules.
(i) Drilling permit fee. With each application or materially amended application, the applicant shall submit to the commission a nonrefundable fee as determined by §3.76 of this title (relating to Fees, Bonds, and Alternative Forms of Financial Security Required To Be Filed) (Statewide Rule 78).

Source Note:The provisions of this §3.5 adopted to be effective January 1, 1976; amended to be effective September 1, 1983, 8 TexReg 3184; amended to be effective March 10, 1986, 11 TexReg 901; amended to be effective October 30, 1986, 11 TexReg 4214; amended to be effective February 24, 1992, 17 TexReg 1225; amended to be effective September 1, 1992, 17 TexReg 5283.