27-504. Drilling units; rules and regulations;
exceptions
A. For the prevention of waste, to protect and enforce the correlative rights of
owners in a pool, and to avoid augmentation and accumulation of risks arising from
drilling an excessive number of wells, or reduced recovery which might result from too
small a number of wells, the commission shall, after a hearing, establish a drilling unit
or units for each pool. The establishment of a unit for gas shall be limited to the
production of gas.
B. Each well permitted to be drilled on a drilling unit shall be drilled under the
applicable rules and regulations and in accordance with the applicable spacing pattern
prescribed by the commission. Exceptions to the rules and spacing pattern may be granted
where it is shown, after notice and hearing, that the unit is partly outside the pool or,
for some other reason, a well so located on the unit would be non-productive. Exceptions
permitting a proposed well to be drilled on an unorthodox location may be granted on the
basis of topography or terrain without notice or hearing.
C. If an exception is granted, the commission shall take action which will offset
any advantage which the person securing the exception may have over other producers by
reason of drilling the well as an exception, and so that drainage from developed units to
the tract with respect to which the exception is granted will be prevented or minimized,
and the producer of the well drilled as an exception will be allowed to produce no more
than a just and equitable share of the oil and gas in the pool.
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