After building an Oklahoma spacing dataset of unparalleled quality in the industry, Oseberg set about doing the same thing for Texas, where field rules are governed by the Railroad Commission (RRC). In Texas field rules govern well spacing requirements, but they also govern a whole lot more concepts. But, as we all know, Texas does things the way Texas wants, so we had to adjust our model.
Let’s start by reviewing what spacing is again: spacing is the process by which states regulate the number and relative location of wells that can be drilled on any given acreage and into any given common reservoir.
The state regulates the process to ensure the reservoir’s production is optimized for the greater good of all operators and royalty interest owners, and — let’s not forget — to maximize any state tax revenues associated with production.
Field Rules in Texas versus Oklahoma Spacing
In Texas, unlike Oklahoma, spacing is not its own atomic regulatory process, but part of a larger regulatory concept called “Field Rules.” A “field” is the regulatory element that represents a continuous, communicative pool of oil and gas.
Unlike in Oklahoma, a Texas operator does not need to file a document to form a spacing unit prior to planning a well. Instead, “field rules” in Texas govern the process and exist in three categories: Statewide, County Regular, and Special.
Statewide Field Rules in Texas dictate that:
- Wells must be a minimum of 467 feet from a “lease line” (the definition of which can get complicated — more on that later).
- “Between well” spacing keeps wells a minimum of 1,200 feet from “any well completed in or drilling to the same field on the same lease or unit.” Statewide Spacing is the law of the land, except where it has been amended through the RRC’s hearing process.
Operators need only review the field rules for a particular property and file a permit along with a plat of the proposed unit (a drawing of the unit and wellbore path) for that acreage and targeted reservoir(s) (i.e. field). When an operator believes that he needs rules other than the Statewide rules, he must present evidence to the RRC to have the Statewide rules (or existing rules) changed. We will explore the ins and outs of Field Rules and the process by which they are amended in a subsequent post.
How Oseberg Collects & Displays Field Rules in Texas
Below are some screenshots of Oseberg’s field rules data set in Texas, as displayed in Atla.
We built our dataset with the following principles in mind:
- Include application filings for new field rules (dockets) so that our users can be tipped off when companies are actively amending existing rules — activity that can indicate that interest is building in an area well ahead of drilling activity. Oseberg’s approach to presenting spacing information to our customers is unique in the industry. Incomplete data, conceptually and/or historically, makes it difficult for parties to see which units are active or to understand how acreage has been developed over time and how current rules will affect drilling program economics. We believe data must be truly robust — both historically and in the level of detail collected and presented.
- Include a unit outline along with the units that have completed wells. For recent units (over the past 2 years), all units will be included regardless of whether there is a completed well because permits are valid in Texas for 2 years. Therefore an operator still has an opportunity to drill the well in that unit and can hold the acreage– assuming that the lease does not expire in that time period.
- Include a map visualization of the existing field rules so that our customers can quickly and easily see how many wells could potentially be drilled on that unit and into what formations. In Oklahoma, we color the units on our map based on the geologic formation name, a feature that was well received by our clients. In Texas, the outline of the fields is based on the Railroad Commission’s own internal rule for adding new wells to existing fields.
Have we convinced you yet that our Texas field rules data set is a game changer in the industry? Don’t take our word for it, contact us for a quick walk through of the Texas product!