Horizontal Oil Well Application

In accordance with Sections 17 and 18 of The Oil and Gas Conservation Act, and Sections 37 to 39 of the The Oil and Gas Conservation Regulations, 2012, a licence must be obtained to drill a horizontal well in Saskatchewan through the Ministry of Energy and Resources.

In addition, a horizontal gas well is required to meet the spacing and target area requirements outlined by The Oil and Gas Conservation Regulations, 2012. Find instructions on how to determine oil and gas well spacing using Saskatchewan's Mining and Petroleum GeoAtlas.

A horizontal well licence is applied for through the Integrated Resource Information System (IRIS). Applications that may be associated to horizontal wells are also made through IRIS:

• An additional wellbore application is made if a company wishes to add a bore to an existing horizontal well that has released its rig.
• A spacing modification application must be made and authorized by the Ministry prior to a well licence submission if a company is proposing to not meet the required interwell setbacks on a proposed horizontal oil well, as outlined in Directive PNG006: Horizontal Oil Well Requirements.

To apply for a horizontal well:

• You must have an IRIS account and the appropriate permissions assigned by your IRIS Security Administrator to submit a well licence application.
• You must have the Mineral Rights to the proposed location for the horizontal well.
  
  • For a horizontal gas well:
    • ensure you have the rights to the entire drainage unit; and
    • ensure the productive interval of the proposed horizontal well is fully contained within the assigned target area.
  • For a horizontal oil well:
    • Ensure the proposed well meets both the interwell setback requirements and the lease boundary interwell setback requirements, or ensure the following:
    • The required consents obtained from the offsetting parties where setback distances are not met.
    • The required agreements are in place where the productive portion is underlying diversely held Crown minerals.
    • The required Freehold pooling agreement is in place where the productive portion is underlying diversely held Freehold minerals.
    • The required consents are obtained from the Freehold lessors to the percentage the Crown collects where the productive portion is underlying diversely held Crown and Freehold minerals.

To apply for a spacing modification:

If an operator proposes a change from the current spacing requirements assigned for any defined or miscellaneous pool, they must apply for and obtain an authorization for spacing modification from the ministry. This must be done before licensing or completing a well if the completion would violate the regulated drainage unit, drainage area, or setbacks.

• must have an IRIS account and the appropriate permissions assigned by your IRIS Security Administrator to submit a well spacing modification application;
• be an operator in the proposed area where requesting the spacing change; and
• complete the Public Notice process or gain the appropriate consents prior to making an application for a spacing modification.

Apply for a horizontal well licence

1. Determine the drainage area by referring to the Saskatchewan Oil and Gas InfoMap.
   
   • See Directive PNG006 for details on the productive interval for determining horizontal oil well drainage areas.
   • Horizontal gas wells must meet the same drainage unit and target area requirements as vertical natural gas wells (see Guideline PNG021: Determining Drainage Units and Target Areas). If it doesn't, the horizontal gas well application is considered non-routine and the operator must submit a Well Spacing Modification Application to the Ministry for authorization.
2. Determine the setback requirements (oil wells only).
   
   • Refer to Directive PNG006 to determine the minimum interwell setback requirements.
3. Log into IRIS and complete the well licence application process in the Well and Facility Infrastructure Module. Attach the required documents.

Apply for an additional wellbore (after rig release)

1. Complete the Additional Horizontal Section(s) Application.
2. Log into IRIS and complete the appropriate application process for authorization in the Well and Facility Infrastructure module and attach the required documents.

Apply to reclassify or recomplete a horizontal well (where the trajectory does not change)

1. Complete the appropriate Reclassification or Recompletion Form and include necessary attachments:
   
   • Reclassification Recompletion (as part of reservoir application) Form
   • Reclassification Recompletion (standalone) Form
2. Log into IRIS and complete the appropriate application process for authorization in the Well and Facility Infrastructure module and attach the required documents.

Apply to revise the Crown allocation on a drilled well with Crown-Freehold pooling

If a well completion was assigned a drainage unit prior to November 19, 2015, that drainage unit assignment remains unchanged.

An applicant can choose to update the drainage area in accordance with Directive PNG006 by providing the Ministry a copy of the as-drilled survey indicating the ultimate drainage area percentages, along with the Freehold Mineral owner's consents to both the drainage area and to any change in the previously assigned drainage area. These documents can be emailed to ER.ServiceDesk@gov.sk.ca.

Log in to IRIS

A company can no longer declare down-spacing. Any reduced setback that is not covered within Directive PNG006 requires a spacing modification authorization. See Well Spacing Modification for more details.

Adding a bore while drilling

• ER Service Desk during business hours at 1-855-219-9373 or ER.servicedesk@gov.sk.ca.
• ERD Emergency Incidents Hotline after hours and on weekends at 1-844-764-3637.

Important:

• Provide notification on the proposed bore and basic information such as the bottom hole location, confirmation that the bore is within the same stratigraphic unit as the original licence, etc.
• An entity is created within IRIS to allow the bore to be reported on.
• An operator is expected to meet the requirements they have disclosed within the well licence application. The as-drilled information is reviewed by the ministry in IRIS. If the well does not meet regulatory requirements it may be subject to action.

Unintentional setback violation

In the case of an unintentional setback violation from a competitive lease boundary, the operator must immediately notify the offsetting mineral and working interest owners with an explanation. A copy of the notification must be provided to the ministry along with comments regarding any previous communications with offsetting owners. The well should be voluntarily shut-in and consents obtained before production can begin.

Crossing a Unit Boundary

A horizontal production well can be proposed to licence with the productive interval crossing a unit boundary. On the licence application within the completion detail, indicate the well is crossing a unit boundary. Production allocation must be specified as per Directive PNG006. Declaration must be made that the proposed well is not meeting equity setbacks and that agreements are in place between unit/non-unit/other unit parties. An attachment must be provided that shows the impacted units and other parties that make up the drainage area of the well and confirms agreements are in place with said parties to allow for production allocation in accordance with Directive PNG006.