Truly Agreed, 2015

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SS HB 92, 2015    (Amended Section - as Truly Agreed)    

259.100. 1. The council shall set spacing units as follows:
     (1) When necessary to prevent waste, to avoid the drilling of unnecessary wells, or to protect correlative rights, the council shall establish spacing units for a pool. Spacing units when established shall be of uniform size and shape for the entire pool, except that when found to be necessary for any of the purposes above mentioned, the council is authorized to divide any pool into zones and establish spacing units for each zone, which units may differ in size and shape from those established in any other zone;
     (2) The size and shape of spacing units are to be such as will result in the efficient and economical development of the pool as a whole;
     (3) An order establishing spacing units for a pool shall specify the size and shape of each unit and the location of the permitted well thereon in accordance with a reasonably uniform spacing plan. Upon application, if the state geologist finds that a well drilled at the prescribed location would not produce in paying quantities, or that surface conditions would substantially add to the burden or hazard of drilling such well, the [state geologist] department is authorized to enter an order permitting the well to be drilled at a location other than that prescribed by such spacing order; however, the state geologist shall include in the order suitable provisions to prevent the production from the spacing unit of more than its just and equitable share of the oil and gas in the pool;
     (4) An order establishing spacing units for a pool shall cover all lands determined or believed to be underlaid by such pool, and may be modified by the [state geologist] department from time to time to include additional areas determined to be underlaid by such pool. When found necessary for the prevention of waste, or to avoid the drilling of unnecessary wells or to protect correlative rights, an order establishing spacing units in a pool may be modified by the state geologist to increase the size of spacing units in the pool or any zone thereof, or to permit the drilling of additional wells on a reasonable uniform plan in the pool, or any zone thereof. Orders of the [state geologist] department may be appealed to the council within thirty days.
     2. [The provisions of subsection 1 of this section shall not apply to noncommercial gas wells.
     3.] Applicants seeking a permit for a noncommercial gas well shall file a bond [or other instrument of credit acceptable to the council equal to the greater of three hundred dollars or one dollar and fifty cents per well foot] under paragraph (d) of subdivision (1) of subsection 5 of section 259.070 and meet the following conditions and procedures: an owner of a noncommercial gas well with drilling rights may apply for the establishment of a drilling unit [containing no less than three acres,] with a well set back of one hundred sixty-five feet on which a well no deeper than eight hundred feet in depth may be drilled. An owner of a noncommercial gas well may apply to the [council] department for a variance to establish a [drilling] spacing unit [of less than three acres and/or less than one hundred sixty-five feet] , to set back distances, or both.


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