1. PSA Wells, Allocation Wells and Stacked Laterals Permitting and Completion Lorenzo Garza & Joe Stasulli

2. How to qualify for Stacked Lateral status
Presentation Overview
How to qualify for Stacked Lateral status
Requirements for PSA and Allocation wells
Filing completions for these types of applications

3. Drilling Permits and Well Compliance– Advanced

4. Drilling Permits and Well Compliance– Advanced
Stacked Laterals- how to qualify
2 or more horizontal drainhole wells within lease/pooled unit in the correlative interval.
Horizontal drainholes are drilled from different surface locations.
The first well drilled establishes the parameters that the subsequent wells will be tested against.
Make sure your field rules allow for Stacked Laterals and if so what well spacing is required.

5. Drilling Permits and Well Compliance– Advanced
Stacked Laterals- how to qualify cont.
Each surface location must be permitted separately and assigned its own API number.
Plat must clearly show all wellbores attempting to qualify for Stacked Lateral status.
To be considered a “regular location” each well must comply to any minimum lease or between well spacing rules

6. Drilling Permits and Well Compliance– Advanced
Stacked Laterals why all the fuss?
For each well that qualifies as a Stacked Lateral well your overall well count will not increase when the RRC tests your lease for density exceptions.
Remember that the wells must be completed in the same regulatory field to qualify as a stacked lateral.

7. Drilling Permits and Well Compliance– Advanced
Stacked Laterals potential problem?
If your well, when completed, does not remain within the established parameters of the “record well” then you will be required to amend the permit to reflect its new status and count this well against your total well count. If you exceed density then an exception to SWR 38 will be needed.

8. Drilling Permits and Well Compliance– Advanced

9. Drilling Permits and Well Compliance– Advanced

10. Drilling Permits and Well Compliance– Advanced
PRODUCTION SHARING AGREEMENTS
Supporting Documentation:
Authorization letter to include % of participation
PSA-12 form showing acreage to be assigned to proposed well
Plat showing the external boundary of all tracts contributing acreage to the proposed well
Well allocation worksheet

11. Drilling Permits and Well Compliance– Advanced
PRODUCTION SHARING AGREEMENTS
Supporting Documentation:
Authorization letter
Contractual right to develop all proposed tracts
To be approved administratively minimum of 65% of mineral and working interest owners must be signed to agreement
If less than 65% sign-up then request to set up application for hearing

12. PSA/ALLOCATION AUTHORITY LETTER

13. Drilling Permits and Well Compliance– Advanced
PRODUCTION SHARING AGREEMENTS
Supporting Documentation:
PSA-12 and Plat
PSA-12 form filled out showing all tracts and acreage involved
Plat that shows the entire boundary of all contributing tracts
All supporting lease/unit line calls should be to exterior boundary of the contributing tracts
Any un-leased tracts within contributing tracts should be identified

15. Drilling Permits and Online Filing - Advanced

16. Drilling Permits and Well Compliance– Advanced
PRODUCTION SHARING AGREEMENTS
Supporting Documentation:
Acreage allocation work sheet
Breakdown of activity for each contributing lease/pooled unit
If any contributing lease/pooled unit is over assigned then a statement as to how the deficiency will be resolved
If SWR 38 density exception is required then application must follow procedures set forth in the rule

17. W-1 ACREAGE ALLOCATION WORK SHEET

18. Drilling Permits and Well Compliance– Advanced

19. Drilling Permits and Well Compliance– Advanced

20. Drilling Permits and Well Compliance– Advanced
What is the difference between a “PSA” well
and an “Allocation” well?
On tracts that you have a valid lease in place an “Allocation”
well permit will allow you to get a drilling permit application
without the qualifier that you have to provide for a “PSA” well
that 65% of both mineral and working interest owners have
signed an agreement as to how production proceeds will be
divided.
2. What it doesn’t allow you to do is incorporate tracts into your
“Allocation” unit that the wellbore does not traverse.

21. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS
SWR Exceptions:
Lease line
Allocation well application will always require an exception
PSA application will require an exception if there is less than 100% participation
Between Well
Normal notification procedures will be followed
Density Exception
Unless specified in the field rules normal notification and data requirements will be followed

22. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example
TRACT A
TRACT B

23. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

24. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

25. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

26. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

27. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

28. Drilling Permits and Well Compliance– Advanced
PSA or ALLOCATION WELLS -Example

29. Drilling Permits and Well Compliance– Advanced
Would you like to make your life a little easier and help decrease the processing time of both your drilling permits and completions?

30. Drilling Permits and Well Compliance– Advanced

31. For further questions concerning Drilling Permits please contact:
Contact Information
For further questions concerning Drilling Permits please contact:
Lorenzo Garza
Phone:
Valerie Atkins
Phone:

32. Drilling Permits and Well Compliance– Advanced
Now Presenting Mr. Joe Stasulli

33. Railroad Commission of Texas Operator Procedures for PSA and Allocation Wells

34. Drilling Permits and Well Compliance– Advanced
Completion Report (G1/W2) must include:
(SA) does NOT need to be included in the lease name.
Sharing Agreement information must be referenced in the G1/W2 remarks.
Detailed Sharing Agreement information must be attached to the completion packet.

35. Drilling Permits and Well Compliance– Advanced

36. Drilling Permits and Well Compliance– Advanced

37. Drilling Permits and Well Compliance– Advanced

38. Drilling Permits and Well Compliance– Advanced

39. Railroad Commission of Texas Operator Procedures for Stacked Laterals

40. Drilling Permits and Well Compliance– Advanced
The first well of a stacked lateral is set up and processed in the same manner as any regular producing well. SL is NOT required to be part of the lease name.
All the standard information should be filed for this well, drilling permit, completion, and associated forms.

41. Drilling Permits and Well Compliance– Advanced

42. Drilling Permits and Well Compliance– Advanced
Any additional lateral wells (2nd, 3rd, 4th) must have an approved drilling permit and completions filed.
The letters SL (Stacked Lateral) should be included in the well number if feasible.
The drilling permit (W-1) and completion (G-1/W-2) remarks should reference that this is a stacked lateral and report all Railroad Commission identification numbers associated with all wells that are part of the stacked lateral. Use the drilling permit numbers if an RRC ID has not been assigned.

43. Drilling Permits and Well Compliance– Advanced

44. Drilling Permits and Well Compliance– Advanced

45. Drilling Permits and Well Compliance– Advanced