Allocation Wells in Texas

While horizontal drilling has dramatically increased the efficient gains in hydrocarbon extraction, as with any new technology, horizontal drilling presents its own unique set of legal and regulatory issues. To be sure, horizontal drilling has challenged the Texas Railroad Commission and the Texas court system to apply and adapt traditional legal and regulatory concepts, which have been developed for over a century for vertical wells, to horizontal wells. 

This presentation will cover the benefits of horizontal drilling as well as the evolution of the TRRC regulations leading to allocation wells. It will also review the existing Texas case law supporting the concept of permitting allocation wells. It will examine various scenarios as to when an allocation well permit might be applicable and will also examine some production calculation methods utilized to comport to the Texas case law. Finally, the presenter will discuss some open questions not addressed by Texas case law and the possible legal ramifications for operators.

Presenter: Michael S. Browning

1 CEU