Well Spacing And Compulsory Integration
Well Spacing and Its Importance
A spacing unit is an area allocated to a well to drill for and produce oil or natural gas. Spacing units are established by statewide laws and regulations, and are governed by Article 23, Title 5 of the Environmental Conservation Law (ECL). Spacing units, and well spacing, are important for the development of oil and natural gas and to prevent the waste of important resources.
An operator proposing to drill a well may apply for a non-conforming spacing unit. This would be an exception to the spacing units established in Title 5 and requires special application procedures.
Compulsory Integration Process
An operator proposing to drill a well who has control of (or leases for) between 60% and 100% of the acreage in the spacing unit must go through compulsory integration. The compulsory integration process is governed by Title 9 of the ECL. It establishes royalty rights for those landowners within the proposed spacing unit who do not have leases with the operator.
The Landowner Option Guide provides information about compulsory integration options for landowners and the general public.
Affirmation of Acreage Control and Rights in Target Formation (PDF, 198 KB) - All applications for well permits subject to Section 23-0501 of the ECL must now include this form.
The applicant should complete parts 1, 2, and 3 of the form. Submit this form together with the application for a well permit. The DEC cannot process a permit application without this form.
Applicant's Checklist for Spacing Unit Map (PDF, 52 KB) - Article 23 of the ECL requires that a spacing unit be established when DEC issues a well permit subject to Title 5. Pursuant to ECL 23-0501(2)(a), an application for a well permit must include a map of the proposed spacing unit. The spacing unit map required by statute does not replace the well plat map described in regulation under 6 NYCRR 552.1(b). Submit the spacing unit map as a separate attachment to the application.
Non-Conforming Spacing Unit Procedures - If the proposed spacing unit does not conform to the statewide spacing governed by Title 5 of the ECL, the operator must apply for a non-conforming spacing unit. Submit this application with the Application for Permit to Drill.
Compulsory Integration Election Form (PDF, 265 KB) - When necessary, DEC schedules compulsory integration hearings for permitted oil or gas wells. At least thirty (30) days before the hearing, the well operator must provide a Compulsory Integration Election Form to each uncontrolled owner in the spacing unit.
Within twenty-one (21) days of receiving the form, owners must choose one of three options on the Compulsory Integration Election Form: 1) participating owner, 2) non-participating owner, or 3) royalty owner. Those who do not make an election will be integrated as a royalty owner and compensated as such.
All forms and documents can also be found on the Division of Mineral Resources Forms page.
Public Hearing Processes for Well Spacing and Compulsory Integration
Well spacing and compulsory integration in new fields in New York are governed by Titles 5 and 9, respectively, of the ECL. On August 2, 2005, Titles 5 and 9 were significantly amended. As such, DEC conducts hearing processes required by the amended statutes as described in DEC Program Policy DMN-1: Public Hearing Processes for Oil and Gas Well Spacing and Compulsory Integration.
The Mineral Resources Environmental Notice Bulletin lists pending applications and associated spacing units that are currently under review by the Oil & Gas Regulation Section, Bureau of Oil & Gas Permitting and Management, in the Albany office of the Division of Mineral Resources.