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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2011
SENATE BILL NO. 214
BY SENATOR MICHOT
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
NATURAL RESOURCES DEPT. Provides relative to the unitization of ultra deep oil and
gas structures. (8/15/11)
AN ACT1
To enact R.S. 30:5.3, relative to the unitization of ultra deep oil and gas structures; to2
authorize such unitization under certain circumstances; to provide relative to the3
authority of the commissioner of conservation; to provide terms, conditions,4
procedures, and requirements; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 30:5.3 is hereby enacted to read as follows: 7
ยง5.3 Ultra deep structure order; application; procedure; allocation of costs;8
rules and regulations9
A. In order to prevent waste and to avoid the drilling of unnecessary10
wells, and to encourage the development of ultra deep oil and gas structures in11
Louisiana, the commissioner of conservation is authorized, as provided in this12
Section, to establish a single unit to be served by one or more wells for an ultra13
deep structure, and to adopt a development plan for such ultra deep structure14
unit.15
B. Without in any way modifying the authority granted to the16
commissioner in R.S. 30:5 through R.S. 30:5.2 and in R.S. 30:9(B), the17 SB NO. 214
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
commissioner upon the application of any interested party may enter an order1
requiring the unit operation of any ultra deep structure when such unit2
operation will promote the development of such ultra deep structure, prevent3
waste, and avoid the drilling of unnecessary wells.4
C. In connection with such order, the commissioner shall have the right5
to establish a unit for an ultra deep structure and to unitize, force pool, and6
consolidate all separately owned tracts and other property ownerships within7
such unit. Any order creating a unit for an ultra deep structure shall be issued8
only after notice and public hearing and shall be based on findings that:9
(1) The order is reasonably necessary to promote the development of an10
ultra deep structure and to prevent waste and the drilling of unnecessary11
wells.12
(2) The proposed unit operation appears economically feasible.13
(3) The stratigraphic top of the ultra deep structure unit is encountered14
or anticipated to be encountered in the initial well for the structure at a15
depth in excess of twenty-two thousand feet true vertical depth.16
(4) Sufficient evidence exists to reasonably establish the limits of the17
ultra deep structure.18
D. Within one year from the date of commencement of production from19
the ultra deep structure, the operator shall file an application with the20
commissioner to establish a plan of development for the ultra deep structure21
unit. The development plan may be subsequently revised by the commissioner22
after notice and public hearing.23
E. The order shall provide for the initial allocation of unit production on24
a surface acreage basis to each separately owned tract within the unit.25
F. No order shall be issued by the commissioner unless interested parties26
have been provided a reasonable opportunity to review and evaluate all data27
submitted by the applicant to the commissioner to establish the limits of the28
deep structure.29 SB NO. 214
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
G. The order creating the unit shall make provision for the proportionate1
allocation to the owners (lessees or owners of unleased interests) of the costs and2
expenses of the unit operation, which allocation shall be in the same proportion3
that the separately owned tracts share in the unit production. The initial well4
and each subsequent well drilled pursuant to the plan of development shall be5
deemed a unit well. In the event of a dispute relative to the calculation of unit6
well costs or depreciated unit well costs, the commissioner shall determine the7
proper costs after notice to all interested owners and public hearing thereon.8
Except as otherwise set forth in this Section, the provisions of R.S. 30:1 through9
30:12 shall apply to units created hereunder.10
H. Upon application and after notice and public hearing and11
consideration of all new available geological and other relevant evidence, the12
commissioner, to the extent required by such evidence, may create, revise, or13
dissolve any unit provided for under this Section or modify any provision of any14
order issued hereunder. Any such order shall provide for the allocation of unit15
production on a just and equitable basis to each separately owned tract within16
the unit.17
I. The provisions of R.S. 30:5.1 shall not be applicable to any unit well18
drilled in a unit established pursuant to this Section.19
J. The commissioner shall prescribe, issue, amend, and rescind such20
orders, rules, and regulations as he may find necessary or appropriate to carry21
out the provisions of this Section.22
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Michelle Broussard-Johnson.
DIGEST
Proposed law provides that in order to prevent waste and to avoid drilling unnecessary wells
and encourage development of ultra deep oil and gas structures, the commissioner of
conservation may establish a single unit, served by one or more wells, for ultra deep
structures.
Proposed law provides for the commissioner to enter orders requiring unit operation of any
ultra deep structure when said unit promotes the development of ultra deep structures,
prevent waste, and avoid the drilling of unnecessary wells. SB NO. 214
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that any order creating an ultra deep structure shall be issued only
after notice and public hearing and shall be based on findings that the order is reasonably
necessary to promote the development of ultra deep structures; the proposed unit operation
appears economically feasible, the stratigraphic top of the ultra deep structure, is
encountered or anticipated to be encountered in the initial well for the structure at a depth
in excess of 22,000 feet true vertical depth, and sufficient evidence exists to reasonably
establish limits of the ultra deep structure.
Proposed law provides that within 1 year from the date of commencement, the operator shall
file an application with the commissioner to establish a plan of development for the ultra
deep structure unit.
Proposed law provides that no order shall be issued by the commissioner unless interested
parties have been provided a reasonable opportunity to review and evaluate all data
submitted by the applicant to the commissioner to establish the limits of the deep structure.
Proposed law provides that the order creating the unit shall make provisions for the
proportionate allocation to the owners, lessees, or owners of unleased interest of the unit
costs and expenses.
Proposed law provides that in the event of a dispute relative to the calculation of the unit
well costs or depreciated unit well costs, the commissioner shall determine the proper costs
after notice to all interested parties and a public hearing is held.
Proposed law provides that after a public hearing and consideration of all new available
geological, engineering and other relevant evidence is provided, the commissioner may
create, revise, or dissolve any unit, or modify any provision of any order issued. Any such
order shall provide for the allocation of unit production on a just and equitable basis to each
separately owned trace within the unit.
Proposed law allows the commissioner the authority to prescribe orders, rules, and
regulations as he deems necessary.
Effective August 15, 2011.
(Adds R.S. 30:5.3)