BEFORE THE BOARD OF OIL AND GAS CONSERVATION AND

THE DEPARTMENT OF NATURAL RESOURCES

AND CONSERVATION OF THE STATE OF MONTANA

 

In the matter of the amendment ARM 36.22.302, 36.22.307, 36.22.1214, 36.22.1215, 36.22.1216, and 36.22.1243 pertaining to oil and gas provisions and production

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

To:  All Concerned Persons

 

            1.  On October 15, 2009, at 8:00 a.m., the Department of Natural Resources and Conservation will hold a public hearing at the Petroleum Club Conference Room, Crowne Plaza Hotel, 22nd Floor, North 27^th Street, Billings, Montana, to consider the proposed amendment of the above-stated rules.

 

            2.  The department will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice.  If you require an accommodation, contact the department no later than 5:00 p.m. on October 9, 2009, to advise us of the nature of the accommodation that you need.  Please contact Terri Perrigo, Board of Oil and Gas Conservation, 1625 Eleventh Ave, Helena, MT 59620; telephone (406) 444-6675; fax (406) 444-2453; or e-mail to [email protected].

 

3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            36.22.302  DEFINITIONS  Unless the context otherwise requires, the words defined shall have the following meaning when found in these rules:

            (1) through (12) remain the same.

            (13)  "Completion report" means board report Form No. 4 which is to be submitted to the board in triplicate for all wells drilled as specified in ARM 36.22.1011 and 36.22.1013 and ARM 36.22.1011.

            (14)  "Common source of supply" is synonymous with pool, as defined in 82-11-101(12), MCA.

            (15)  "Condensate" means the liquid produced by the condensation of a vapor or gas either after it leaves the reservoir or while still in the reservoir. Condensate is often called distillate, drips, or white oil, etc.

            (16) through (22) remain the same.

            (23) "Drilling fluid" means any fluid used in the drilling of an oil or gas well to remove, hold, and carry cuttings to the surface; to cool or lubricate a drill bit; to line the bore hole; to control subsurface pressures; to support the weight of the drill pipe or casing; to protect formations; or to transmit hydraulic horsepower to the drill bit.

            (23)  "Drilling fluid" means any fluid used in the drilling of an oil or gas well to:

            (a)  remove, hold, and carry cuttings to the surface;

            (b)  cool or lubricate a drill bit;

            (c)  line the bore hole;

            (d)  control subsurface pressures;

            (e)  support the weight of the drill pipe or casing;

            (f)  protect formations; or

            (g)  transmit hydraulic horsepower to the drill bit.

            (24)  "Dry gas" means natural gas obtained from pools that produce gas only, or natural gas obtained that does not contain the heavier fractions that may easily condense under normal atmospheric conditions and that is not casinghead gas.

            (25) and (26) remain the same.

            (27)  "Flow line" means:

            (a)  means a pipeline used to transfer crude oil, gas, and produced water from the wellhead to production treatment, separation, or storage facilities; and

            (b)  also means a pipeline used to transfer produced water or other fluids from a production or injection facility to an injection or disposal well.  Flow line does not mean a transmission pipeline. ;

            (c) does not mean a transmission pipeline.

            (28) through (37) remain the same.

            (38)  "Hazardous waste" means any waste defined as a hazardous waste in ARM 17.54.303 75-10-403(8)(a), MCA.

            (39) through (47) remain the same.

            (48)  "Oil", as defined in 82-1-111(3), MCA, means crude petroleum oil and other hydrocarbons regardless of gravity that are produced at the wellhead in liquid form by ordinary production methods and that are not the result of condensation of gas before or after it leaves the reservoir. (82-1-111, MCA.)

            (49)  through (52) remain the same.

            (53)  "Owner", as defined in 82-11-101(9), MCA, means the person who has the right to drill into and produce from a pool and to appropriate the oil or gas the person produced from a pool either for the person or others or for the person or for the person and others, and the term includes all persons holding that authority by or through the person with the right drill. (82-11-101, MCA.)

            (54)  "Perennial watercourse" means a lake, stream, river, or other body of water that flows or retains water continuously throughout the year."

            (55) remains the same.

            (56)  "Person", as defined in 82-11-101(10), MCA, means any natural person, corporation, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind and includes any agency or instrumentality of the state or any governmental subdivision of the state. (82-1-111, MCA.)

            (57) through (77) remain the same.

            (78)  "Waste", as defined in 82-11-101(16), MCA, means:

            (a)  means physical waste, as the term is generally understood in the oil and gas industry;

            (b)  means the inefficient, excessive, or improper use of, or the unnecessary dissipation of reservoir energy;

            (c)  means the location, spacing, drilling, equipping, operating, or producing of any oil or gas well(s) or wells in a manner that causes or tends to cause reduction in the quality of oil or gas ultimately recoverable from a pool under prudent and proper operations or that causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas; and

            (d)  means the inefficient storing of oil or gas; but .  Waste does not mean the production of oil or gas from any pool or by any well to the full extent that the well or pool can be produced in accordance with methods designed to result in maximum ultimate recovery, as determined by the board.

            (e) does not mean the production of oil or gas from any pool or by any well to the full extent that the well or pool can be produced in accordance with methods designed to result in maximum ultimate recovery, as determined by the board. (82-11-101, MCA.)

            (79) remains the same.

            (80)  "Well logs" means electrical, radiation, sonic, or other routine logs run by mechanical means in a well and all other logs, surveys, analyses, and reports run or made.

            (81)  "Well, wildcat or exploratory" means:

            (a)  means any well drilled for oil or gas outside of a delineated field; or

            (b)  means a well drilled to a stratum other than one then productive within a delineated field.  Well does not mean a stratigraphic well or core hole. ; but

            (c)  does not mean a stratigraphic well or core hole.

 

AUTH:  82-11-111, MCA

IMP:  82-11-111, MCA

 

            36.22.307  ADOPTION OF FORMS  (1)  The forms hereinafter listed are hereby adopted by reference and made a part of these rules for all purposes, and the same must be used as herein directed in giving notice and in making reports and requests to the board. Copies of printed forms will be supplied by the board on request.   Address requests for forms to:   Board of Oil and Gas Conservation, 1625 Eleventh Avenue, Helena, Montana, 59620-1601 or 2535 St. Johns Avenue, Billings, Montana, 59102.

(a) through (f) remain the same.
(g)  Form No. 7	Transportation Agency's Monthly Report of Receipts and Disposition of Crude Oil
(h) through (k) remain the same but are renumbered (g) through (j).
(l)  Form No. 11	Reservoir Survey Report and Gas-Oil Ratio
(m) and (n) remain the same but are renumbered (k) and (l).
(m)  Form No. 14-2A	Assignment Agreement
(n)  Form No. 14-2B	Letter of Credit
(o) through (s) remain the same.
(t)  Form No. 24	Irrevocable Standby Letter of Credit

  

            AUTH:  82-11-111, MCA

            IMP:  2-4-201, MCA

 

            36.22.1214  SUBSURFACE PRESSURE TESTS  (1)  If requested by the board, and under the terms and conditions specified, Within 30 days following the completion of each well in any pool whether such well produces oil or gas or both, the owner of such well shall make a subsurface pressure test on such well and shall report the results thereof to the board on Form No. 11 within 20 days after such test is made. Each such well shall remain completely shut in for at least 24 hours prior to the test. The subsurface determination shall be obtained as close as reasonably possibly to the midpoint of the productive section of the reservoir. Further, the board will may require periodic subsurface pressure measurements on a sufficient number of wells in any pool to provide adequate data for establishing MER.

 

            AUTH:  82-11-111, MCA

            IMP:  82-11-123, 82-11-124, MCA

 

            36.22.1215  STABILIZED PRODUCTION TEST  (1)  If requested by the board, and under the terms and conditions specified, Within 60 days following the completion or recompletion of an oil well, the operator shall file with the board's petroleum engineer at its Billings office the results of a stabilized production test of at least 72 hours duration showing the average daily oil production and average daily gas production during the test period.

 

            AUTH:  82-11-111, MCA

            IMP:  82-11-123, 82-11-124, MCA

 

            36.22.1216  GAS-OIL RATIO TESTS  (1)  If requested by the board, and under the terms and conditions specified, Within 30 days following the completion and within 30 days following each recompletion of each well producing oil and either gas or casinghead gas or both, the owner of such well shall make a gas-oil ratio test of such well. and the results of such test shall be reported to the board on Form No. 11 within 20 days after the test is made. Also, thereafter Thereafter, each operator shall make a gas-oil ratio test at such other time or times as the board may hereafter designate, and similarly report the results of each such test within the time specified.

 

            AUTH:  32-11-111, MCA

            IMP:  82-11-123, 82-11-124, MCA

 

            36.22.1243  REPORTS FROM TRANSPORTERS, REFINERS, PURCHASERS, AND GASOLINE OR EXTRACTION PLANTS  (1)  All transporters of crude oil shall make monthly reports to the board on Form No. 7. All refiners of crude oil shall make monthly reports to the board on Form No. 8. All purchasers of gas shall make monthly reports to the board on Form No. 9. All operators of gasoline or other extraction plants shall make monthly reports to the board on Form No. 10. Such forms shall contain all information required therein and shall be filed with the board on or before the last day of each month covering the preceding month.

 

            AUTH:  82-11-111, MCA

            IMP:  82-11-123, MCA

 

REASONABLE NECESSITY: The amendments to ARM 36.22.302 and 36.22.307 are reasonably necessary to correct minor grammatical errors, and remove and update obsolete forms and references to the Administrative Rules of Montana and the Montana Code Annotated.  The amendments to ARM 36.22.1214, 36.22.1215, and 36.22.1216 are reasonably necessary to eliminate the submission of unnecessary reports, but to maintain the authority of the board to require their submission where it deems it to be necessary.  The amendment to ARM 36.22.1243 is reasonably necessary to eliminate the use of, and reference to, Form 7.

 

            4.  Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing.  Written data, views, or arguments may also be submitted to: Terri Perrigo, Board of Oil and Gas Conservation, 1625 Eleventh Ave., Helena, MT 59620; telephone (406) 444-6675; fax (406) 444-2453; or e-mail to [email protected], and must be received no later than 5:00 p.m., October 22, 2009.

 

5.  Legal counsel for the Board of Oil and Gas Conservation, has been designated to preside over and conduct this hearing.

 

6.  An electronic copy of this Notice of Public Hearing on Proposed Amendment is available through the department's web site at http://www.dnrc.mt.gov.  The department strives to make the electronic copy of this Notice of Public Hearing on Proposed Amendment conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered.

 

            7.  The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding conservation districts and resource development, forestry, oil and gas conservation, trust land management, water resources, or a combination thereof.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be sent or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.

 

8.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

/s/  Mary Sexton                                             /s/  Tommy Butler                                         

MARY SEXTON                                            TOMMY BUTLER

Director                                                          Rule Reviewer

                                                                       

           

Certified to the Secretary of State September 14, 2009.