Off-Target Wells
An off-target well is a non-horizontal well drilled outside of the prescribed target area, as described in a Pool Order, spacing area, or The Oil and Gas Conservation Regulations, 2012. An oil and gas company applying for either a well licence or for a new completion on an existing well, must disclose if the well will be off-target based on its completion as outlined in:
- Sections 17 and 27 of The Oil and Gas Conservation Act; and
- Section 38 of The Oil and Gas Conservation Regulations, 2012.
1. Guidance
Off-target well completion information can be provided to the Ministry of Energy and Resources through:
- A well licence application;
- As part of a recompletion/reclassification application; or
- As part of a commingling of production application
Rules and policies for off-target wells are set out in Directive PNG007: Off-Target Well Completion Requirements. Well licence, recomplete/reclassify and commingle production applications are processed by the ministry through:
- A Routine Process: If the well is off-target and all the equity concerns are addressed, then the off-target status of the well won't trigger any additional review or requirements.
- A Non-Routine Process: If the well has an equity concern, and there are unresolved objections to the off-target well that are disclosed as part of the licence application, additional information from the applicant may be required by the ministry.
- A Subsequent Completion Change Application: A new completion on an existing well needs to be assessed to determine if it's off-target. This may require the applicant to include applications for a recompletion/reclassification or commingling of production.
2. Determine if the Well is Off-Target
Determine if a well is off-target by referring to Instructions for Determining Oil and Gas Well Spacing Using the InfoMap, and Directive PNG007.
A completion may cause a well to be off-target for a variety of reasons, including:
- Development
- Exploration
- Surface obstruction or topographic
- Uneconomic well(s) in the drainage unit
An approved completion that results in a well becoming off-target may be subject to an off-target penalty.
3. Determine Equity Concerns
When encroaching another drainage unit, ensure the drainage unit for the proposed well and the existing drainage unit have identical:
- Mineral ownership
- Lessee(s) and partners
- Well ownership and operator
- Farm-in agreements
If these aren't identical, the applicant may be required to complete the Public Notice Process before licensing the well at the proposed location, and the well will be subject to an off-target penalty. Depending on the type of off-target well, Public Notice may be required for both the location of the proposed well and to obtain a waiver to the off-target penalty. For more information see Directive PNG007 and Directive PNG009: Public Notice Requirements.
4. Determine if Well Spacing Needs Modification
If the off-target well isn't the only active well in the stratigraphic unit, and there isn't a Minister's Order, Pool Order or other authorization approving multiple wells in the drainage unit, then a well spacing modification, a recompletion/reclassification or a commingling of production application must be submitted before obtaining a well licence.
5. Get Your Well Licence
Once the applicant has completed these steps, they're ready go to the Integrated Resource Information System (IRIS) to apply:
- For a well licence
- To recomplete/reclassify a well; or
- To commingle production.