Virginia Code 45.2-1619: Field rules and drilling units for wells; hearings and orders
A. In order to prevent the waste of gas or oil or the drilling of unnecessary wells or to protect correlative rights, the Board on its own motion or upon application of the gas or oil owner may establish or modify drilling units. Drilling units, to the extent reasonably possible, shall be of uniform shape and size for an entire pool. Any gas, oil, or royalty owner may apply to the Board for the establishment of field rules and the creation of drilling units for the field. Unless such motion is made or an application is received at least 30 days prior to the next regularly scheduled monthly meeting of the Board, it shall not be heard by the Board at such meeting and shall be heard at the next meeting of the Board thereafter.
Terms Used In Virginia Code 45.2-1619
- Board: means the Virginia Gas and Oil Board. See Virginia Code 45.2-1600
- Coal operator: means any person who operates or has the right to operate a coal mine. See Virginia Code 45.2-1600
- Coal owner: means any person who owns, leases, mines and produces, or has the right to mine and produce a coal seam. See Virginia Code 45.2-1600
- Coal seam: includes a stratum of less than 20 inches in thickness if it (i) is being commercially worked or (ii) in the judgment of the Department could foreseeably be commercially worked and will require protection if a well is drilled through it. See Virginia Code 45.2-1600
- Coalbed methane gas: means occluded natural gas produced from coalbeds and rock strata associated with it. See Virginia Code 45.2-1600
- Drilling unit: means the acreage on which one gas or oil well may be drilled. See Virginia Code 45.2-1600
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Field rules: means rules established by order of the Board that define a pool, drilling units, production allowables, or other requirements for gas or oil operations within an identifiable area. See Virginia Code 45.2-1600
- Gas or oil owner: means any person who owns, leases, has an interest in, or has the right to explore for, drill, or operate a gas or oil well as principal or lessee. See Virginia Code 45.2-1600
- Mine: includes all of the land or property of the mining plant, including both the surface and subsurface, that is used in or contributes directly or indirectly to the mining, concentration, or handling of the mineral resources, including all roads. See Virginia Code 45.2-1600
- Oil: means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, that are produced at the well in liquid form by ordinary production methods and are not the result of condensation of gas after it leaves the underground reservoir. See Virginia Code 45.2-1600
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Pool: means an underground accumulation of gas or oil in a single and separate natural reservoir. See Virginia Code 45.2-1600
- Royalty owner: means any owner of gas or oil in place, or owner of gas or oil rights, who is eligible to receive payment based on the production of gas or oil. See Virginia Code 45.2-1600
- Well: means any shaft or hole sunk, drilled, bored, or dug into the earth or into underground strata for the extraction, injection, or placement of any gaseous or liquid substance or any shaft or hole sunk or used in conjunction with such extraction, injection, or placement. See Virginia Code 45.2-1600
B. At any hearing of the Board regarding the establishment or modification of drilling units, the Board shall make the following determinations:
1. Whether the proposed drilling unit is an unreasonable or arbitrary exercise of a gas or oil owner’s right to explore for or produce gas or oil;
2. Whether the proposal would unreasonably interfere with the present or future mining of coal or other minerals;
3. The acreage to be included in the order;
4. The acreage to be embraced within each drilling unit and its shape;
5. The area within which wells may be drilled on each unit; and
6. The allowable production of each well.
C. In establishing or modifying a drilling unit for coalbed methane gas wells, and in order to accommodate the unique characteristics of coalbed methane development, the Board shall require that drilling units conform to the mine development plan, if any. If requested by the coal operator, well spacing shall correspond with mine operations, including the drilling of multiple coalbed methane gas wells on each drilling unit.
D. If an order to establish or modify a drilling unit will allow a well to be drilled into or through a coal seam, any coal owner within the area to be covered by the drilling unit may object to the establishment of the drilling unit. Upon a coal owner’s objection, and without superseding, impairing, abridging, or affecting any contractual rights or obligations existing between coal and gas owners, the Board shall make its determination in accordance with the provisions of §§ 45.2-1611 and 45.2-1612.
E. The Board may continue a hearing to its next meeting to allow for further investigation and the gathering and taking of additional data and evidence. If at the time of a hearing there is not sufficient evidence for the Board to determine field boundaries, drilling unit size or shape, or allowable production, the Board may enter a temporary order establishing provisional drilling units, field boundaries, and allowable production for the orderly development of the pool pending receipt of the information necessary to determine the ultimate pool boundaries, spacing of wells for the pool, and allowable production. Upon additional findings of fact, the boundaries of a pool, drilling units for the pool, and allowable production may be modified by the Board.
F. Unless otherwise provided for by the Board, after an application for a hearing to establish or modify drilling units or pool boundaries has been filed, no additional well shall be permitted in the pool until the Board’s order establishing or modifying the pool or units has been entered.
G. After the Board issues a field or pool spacing order that creates drilling units or a pattern of drilling units for a pool, if a gas or oil owner applies for a permit or otherwise indicates his desire to drill a well outside of such drilling units or pattern of drilling units and thereby potentially extend the pool, the Board may, on its own motion or the motion of any interested person, require that the well be located and drilled in compliance with the provisions of the order affecting the pool.
1982, c. 347, § 45.1-301; 1987, c. 452; 1989, c. 529; 1990, c. 92, § 45.1-361.20; 2021, Sp. Sess. I, c. 387.