The Ohio Department of Natural Resources – Division of Oil & Gas Resources Management (DOGRM) recently revised its rules governing spacing of horizontal oil and gas production wells. The new rules, which became effective on Oct. 10, 2019, will bring Ohio’s horizontal well spacing regulations in line with what accepted science and drilling data indicates is a more efficient and productive spacing for horizontal wells in Ohio.
Under the prior version of Ohio Administrative Code §1501:9-1-04, which applied to both conventional and horizontal wells, any oil and gas production well drilled into a pool located at least 4,000 feet in depth must be set back at least 500 feet from the boundary of the leased tract or drilling unit. That prior version of the rule also required a spacing of at least 1,000 feet between wells producing from the same pool.
Effective Oct. 10, 2019, Ohio Administrative Code §1501:9-1-04 was revised to require only a 150 foot (+/- 10 percent) setback from the first and last “take points” of a horizontal well and the boundary of the drilling unit or subject tract. This change is consistent with industry practice of seeking a setback variance at the heel and toe of horizontal wells in order to more fully develop a drilling unit. Drilling data shows that well stimulation operations do not typically produce fractures that propagate more than 150 feet beyond the heel and toe of a typical Ohio shale well. Thus, the prior 500 foot setback requirement was excessive and left unproduced resources at the heel and toe of a well.
The revised regulations also reduce the required setback between the boundary of the drilling unit and the other take points in the well from 500 feet to 400 feet (+/- 10 percent). Finally, the revised regulations now provide no minimum spacing between horizontal wells within a “subject tract” unless “adverse communication” occurs between the wells and the subject tract. Again, these setback reductions should help achieve more complete production of resources within a drilling unit.
It is important to keep in mind that for purposes of these regulations, Ohio Rev. Code §1509.01 defines a “horizontal well” as an oil and gas production well that is drilled in a horizontal configuration in the Point Pleasant, Utica or Marcellus formations, and is stimulated.
Consistent with the new rules, Ohio Administrative Code §1501:9-1-01 introduces new terms and definitions. Specifically, “adverse communication” is defined as “negative communication at an offset well that may include damage to production tubing, casing, or the wellhead, or sudden significant increased volume of brine from the subsequent hydraulic fracturing treatment of another well in the same subject tract.” Likewise, the term “take point” has been introduced and defined as “any point along a well bore where oil, gas, or oil and gas may be produced from a pool.”