Tex.
Nat. Resources Code Section 52.034
Offset Wells
(a)
In this section:(1)
“Horizontal drainhole well” means a well with a horizontal drainhole that may produce oil or gas along at least 100 feet of the drainhole.(2)
“Take point” means any point in a horizontal drainhole well where oil and gas can be produced from the reservoir or field interval recognized by the Railroad Commission of Texas.(3)
“Unconventional fracture treated field” means an oil or gas field in which horizontal well development and hydraulic fracture treatment must be used to recover resources from all or part of the field.(a-1)
Except as provided by Subsection (a-2), if oil or gas is produced in commercial quantities from a well located on a privately owned area or areas of state land leased at a lesser royalty and the well is located within 1,000 feet of an area leased under this subchapter or is draining an area leased under this subchapter, the lessee of the state area shall begin in good faith and prosecute diligently the drilling of an offset well or wells on the area leased from the state within 60 days after the initial production from the draining well or the well located within 1,000 feet of the leased state area.(a-2)
If the well producing oil or gas in commercial quantities under Subsection (a-1) is a horizontal drainhole well located in an unconventional fracture treated field, a lessee of a state area is not required to drill an offset well as provided by Subsection (a-1) unless any take point in the horizontal drainhole well is located closer to the leased state area than the greater of:(1)
the minimum distance established by the applicable lease-line spacing requirement of the Railroad Commission of Texas; or(2)
a perpendicular distance of 330 feet.(b)
An offset well shall be drilled to a depth and the means shall be employed which may be necessary to prevent undue drainage of oil or gas from beneath the state area.(c)
Within 30 days after an offset well has been completed or abandoned, a log of each well shall be filed in the land office.(d)
At the determination of the commissioner and with the commissioner’s written approval, the payment of a compensatory royalty shall satisfy the obligation to drill an offset well or wells required by Subsection (a-1). Such compensatory royalty shall be paid at the royalty rate provided by the state lease issued under this subchapter and shall be paid on the market value at the well of production from the well producing oil or gas in commercial quantities described by Subsection (a-1).(b)
The information obtained from the Department of the Interior under an agreement executed under Subsection (a) of this section is confidential and may not be used publicly, opened to public inspection, or disclosed, except that the information may be examined and used by the governor and the commissioner of the General Land Office, or their designees, for the administration of their official duties and to assure a fair and equitable division of federal revenues derived from leasing lands adjacent to the boundaries of this state.(c)
The state waives its right to claim sovereign immunity in any action commenced against the state for unauthorized disclosure of the confidential information obtained from the Department of the Interior under an agreement executed by the governor under Subsection (a) of this section, and waives its right to claim that an employee who revealed privileged information was acting outside the scope of employment by disclosing the information.(d)
The state agrees to hold the United States government harmless from any actions or damages brought as a result of the acts or omissions of the state or its employees in releasing proprietary information obtained under an agreement executed under Subsection (a) of this section.
Source:
Section 52.034 — Offset Wells, https://statutes.capitol.texas.gov/Docs/NR/htm/NR.52.htm#52.034 (accessed Jun. 5, 2024).
