Special Well Spacing - Standard/Nonstandard Legal Header

Project Application

Timeline

Our estimated processing time is 50 business days. See our timeline spreadsheet for updates.

Purpose of the Application

To increase the amount of resources they can recover, energy companies will place wells in more than one location in individual pools or formations. We regulate how many wells can be placed within a defined area, referred to as the well spacing. Our well spacing requirements promote resource conservation by ensuring that reservoirs are developed efficiently and orderly. These requirements also help protect equity among mineral rights owners.

Our regulations for well spacing are governed by the Oil and Gas Conservation Rules (OGCR) and the Oil and Gas Conservation Act (OGCA). Our requirements are set out in Directive 065: Resources Applications for Oil and Gas Reservoirs.

Under section 79(4) of the OGCA, we will consider applications for special well spacing that would allow for increased well density from the baseline densities for standard drilling spacing units (DSUs) prescribed in section 4.021 of the OGCR. Under Part 4 of the OGCR, a standard DSU is one section of land for a gas well and a quarter section of land for an oil well.

Process Checklist

Before Applying
A company submitting a standard or nonstandard spacing application must meet our requirements in section 7.3.2 of Directive 065. The minimum criteria for an application to be processed under the standard or nonstandard applications paths should also be reviewed before submitting an application. These criteria are set out in section 7.4.2 and 7.4.3, respectively, of Directive 065.

We have a separate application process for special well spacing – quick applications. For these applications, minimum criteria for an application under the quick processing path are set out in section 7.4.1 of Directive 065.

Please note the following:

  • Our approval does not authorize drilling of wells or construction of related facilities. Additional approvals from us or other government agencies are required to drill oil and gas wells.
  • A block of land that contains multiple, connected DSUs of common ownership can be developed without a special well spacing approval, limited only by the standard target area on the external boundaries of that block of land (as long as the baseline well density per DSU is not exceeded for that area). 

Submit an Application
Companies must submit their standard or nonstandard spacing applications through our Digital Data Submission (DDS) system. We will register each application and assign it a reference number.

By submitting an application, the company accepts that its information is no longer confidential.

Things to Remember
When submitting an application, please note the following:

  • Under Section 4.040(3) of the OGCR, applications must demonstrate that
    • recovery will be improved;
    • additional wells are necessary to provide capacity to drain the pool at a reasonable rate without adverse effect on resources conservation; or
    • spacing has already been substantially established in a pool, and the proposed spacing provisions are equal to or more restrictive than the established pool spacing.
  • Under Section 1.020(2)(4) of the OGCR and unit 7 of Directive 065, holdings and units must be composed of whole and connected DSUs, and the ownership must be considered common at both the lessor and lessee levels.

Also note the following clarifications:

  • Present all data provided in the application using the International System of Units.
  • Submit an analysis of all data provided in support of the application. Describe how the data support the requested increase in well density.
  • Note that applications for special spacing in holdings or units should reflect standard buffer zone distances (see unit 7 in Directive 065). For heavy-oil development where oil density is 920 kg/m3 or more at 15°C, a buffer zone of 50 metres from all holding or unit boundaries may be considered.
  • Conduct a fluid analysis for oil applications when the density of the oil is 920 kg/m3 or more at 15°C. The applicant must analyze the native reservoir fluid, which includes the density of the oil.
  • Include a proposed development plan for the area of application, including a map of locations, the timing of drilling, and the type of drilling.
  • Ensure that the estimated ultimate recovery (EUR) from decline analysis—entered for each well into the volumetric data form—matches the EUR from the decline submitted as an attachment to the application. If the EUR does not match, please explain the reasons for the discrepancy in the application. We will close the application if this explanation is not included when there is a discrepancy.
  • Ensure that the DSU area entered for each well in the volumetric data form is adjusted to account for the number of DSUs that the productive part of the wellbore extends across. For horizontal wells, this may require a DSU area greater than one standard DSU.
  • Note that the wells entered into the productivity and volumetric data forms should represent the type of development being proposed (e.g., vertical, deviated or horizontal wells).
  • If a commingled pool name is populated in the productivity and volumetric data forms, ensure that the producing formation and producing pool are edited to specify the appropriate producing formation and pool.
  • When discussing how the proposed spacing will affect hydrocarbon recovery, include
    • recovery factors at current well spacing and proposed spacing, and
    • the incremental recovery volume.
  • When discussing well productivity and volumetric data, include
    • method used to derive the petrophysical properties in the volumetric form;
    • economic limit / abandonment rate used in the decline analysis;
    • explanation of how the wells in the forms are representative of the proposed development and the entire area of application;
    • comparative analysis of the estimated and calculated recovery factors, including how these recovery factors support the requested well density; and
    • discussion of fluid ratios and water-cut values of wells in the productivity form.

Review Process

  1. We share all applications on our Public Notice of Application page to encourage public participation in the approval process.
  2. Anyone who believes that they may be directly and adversely affected by an application can file a statement of concern (SOC). If we receive an SOC, it may take us longer to process the application.
  3. We will assign the application to a subject matter expert for initial review. If information is missing (i.e., the application is not complete and Directive 065 requirements are missing), we will close the application. Otherwise, we will proceed with a full technical review. We review the following:
    • distance of the proposed application areas to previously approved spacing for the same formations and substance
    • proposed provisions
    • available production, reservoir, and geological information within the area of the application and offsetting areas; this analysis is not limited to the information submitted by the applicant and may include analysis of additional wells and information
    • impact of the proposed well spacing on resource recovery
    • typical performance of existing wells
    • existing and proposed development within the area of application
    • conservation risks
    • pool depletion
    • reservoir management
  4. We may request additional information (through a supplemental information request) to complete our technical review.
  5. We will decide to approve, close, or deny the application. If we close it, the applicant may reapply without prejudice. If we deny it, the applicant can file an appeal through our appeal process.
  6. We will provide the applicant with a link to the letter with our decision, which is accessible for 30 days through the Integrated Application Registry. We will also share our decision on our Publication of Decision page.