The OGCR now allows unlimited well density in all zones on undrilled drilling spacing units or spacing units not already subject to an AER issued approval such as a downspacing or holding approval.
The default drilling spacing unit is still one quarter section for oil and one section for gas wells. Operators still need to drill only one well to prove productivity and to hold the mineral rights on a specific drilling spacing unit.
The default target areas have also remained in place. The default for the province are central target areas with a 100 m buffer on all sides of the drilling spacing unit for oil and 150 m buffer on all sides for gas except in those parts of the province described in the OGCR Appendix 13A with a 150 m buffer on the south and west sides of the gas drilling spacing unit; primarily gas drilling spacing units south of township 52 and east of the 5th meridian.
A block of land containing multiple, contiguous drilling spacing units of common ownership on a lessor and lessee level, as defined in section 1.020(2)(4) of the OGCR, may be developed without a special well spacing approval, limited only by the standard target area on the external boundaries of that block of land. Figures showing examples of development on multiple contiguous drilling spacing units of common ownership are found in Directive 065 Appendix L.
The regulations regarding Fractional Tracts of Land and Off-target Penalties remain unchanged.
As with previous regulatory changes to spacing, spacing approvals currently in place will remain in effect unless an application is made to the AER to rescind that specific spacing and/or holding approval. To take advantage of this significant change to the spacing regulations and simplify development/drilling plans, we strongly encourage operators to rescind all existing spacing approvals in favour of these recent changes or the unlimited well density approved in the various subsurface orders.
Please contact us if you would like to discuss these changes with respect to your operations or would like us to review your company’s spacing approvals and provide a program/schedule to rescind (the approvals).
