(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
  (1) Correlative interval--The depth interval designated by the field rules or by new field designation on Form P-7 (New Field Designation).
  (2) First take point--The take point in a horizontal drainhole well nearest to the point where the drainhole penetrates the top of the correlative interval. The first take point may be at a location different from the penetration point.
  (3) Horizontal drainhole--That portion of the wellbore drilled in the correlative interval, between the penetration point and the terminus.
  (4) Horizontal drainhole displacement--The calculated horizontal displacement of the horizontal drainhole from the first take point to the last take point.
  (5) Horizontal drainhole well--Any well that is developed with one or more horizontal drainholes having a horizontal drainhole displacement of at least 100 feet.
  (6) Last take point--The take point in a horizontal drainhole well nearest the terminus. The last take point may be at a location different from the terminus.
  (7) Nonperforation zone (NPZ)--A portion of a horizontal drainhole well within the field between the first take point and the last take point that the operator has intentionally designated as containing no take points pursuant to the spacing requirements in §3.37 of this title (relating to Statewide Spacing Rule).
  (8) Penetration point--The point where the drainhole penetrates the top of the correlative interval.
  (9) Record well--The single horizontal drainhole within a stacked lateral well designated by the operator as the record well for reporting purposes.
  (10) Stacked lateral well--A horizontal drainhole well in which the following conditions are met:
    (A) there are two or more horizontal drainhole wells on the same lease, pooled unit, or unitized tract at different depths within the correlative interval for the field;
    (B) the horizontal drainholes are drilled from different surface locations;
    (C) all take points of a stacked lateral well's horizontal drainholes are within a rectangular area the width of which is 660 feet, and the length of which is 1.2 times the distance between the first and last take points of the record well;
    (D) all horizontal drainholes are tested independently and have the same classification (i.e., gas or oil). Only horizontal drainholes of the same classification are eligible to be designated as a stacked lateral well; and
    (E) there is only one operator for the stacked lateral well.
  (11) Take point in a horizontal drainhole well--Any point along a horizontal drainhole where oil and/or gas can be produced from the correlative interval.
  (12) Terminus--The farthest point required to be surveyed along the horizontal drainhole from the penetration point and within the correlative interval.
  (13) Unconventional fracture treated (UFT) field--A field designated by the Commission under subsection (i) of this section for which horizontal well development and hydraulic fracture treatment (as defined in §3.29(a)(15) and (16) of this title (relating to Hydraulic Fracturing Chemical Disclosure Requirements)) must be used in order to recover resources from all or a part of the field and which may include the drilling of vertical wells along with the drilling of horizontal wells.
(b) Drainhole spacing.
  (1) No take point on a horizontal drainhole shall be located nearer than 1,200 feet (horizontal displacement), or other between-well spacing requirement under applicable rules for the field, to any take point along any other horizontal drainhole in another well, or to any other well completed or permitted in the same field on the same lease, pooled unit, or unitized tract.
  (2) No take point on a horizontal drainhole shall be located nearer than 467 feet, or other lease-line spacing requirement under applicable rules for the field, from any property line, lease line, or subdivision line.
  (3) All wells developed with horizontal drainholes shall otherwise comply with §3.37 of this title (relating to Statewide Spacing Rule), or other applicable spacing rules.
  (4) If the drilling permit application indicates that there will be one or more NPZs, then the as-drilled plat filed after completion of the well shall be certified by a person with knowledge of the facts pertinent to the application that the plat is accurately drawn to scale and correctly reflects all pertinent and required data. In addition to the information required under subsection (f) of this section, the certified as-drilled plat shall include:
    (A) the as-drilled track of the wellbore;
    (B) the location of each take point on the wellbore;
    (C) the boundaries of any wholly or partially unleased tracts within the distance permitted under §3.37 of this title or applicable special field rules of the wellbore; and
    (D) notations of the shortest distance from each wholly or partially unleased tract within the distance permitted under §3.37 of this title or applicable special field rules of the wellbore to the nearest take point on the wellbore.
  (5) To comply with the spacing requirements set forth in paragraph (3) of this subsection, the take-points along the as-drilled location of a properly permitted horizontal drainhole shall fall within a rectangle established as follows:
    (A) two sides of the rectangle are parallel to the permitted drainhole and 50 feet or 10% of the minimum distance to any property line, lease line or subdivision line, whichever is greater, on either side of the drainhole; and
    (B) the other two sides of the rectangle are perpendicular to the sides described in subparagraph (A) of this paragraph, with one of those sides passing through the permitted first take point and the other side passing through the permitted last take point.
  (6) Prior to perforating the wellbore within an approved NPZ, the operator must amend the permit to authorize perforations within the originally-approved NPZ.
(c) Well densities. All wells developed with horizontal drainholes shall comply with §3.38 of this title (relating to Well Densities) or other applicable density rules.
(d) Proration and drilling units.
  (1) Acreage may be assigned to each horizontal drainhole well for the purpose of allocating allowable oil or gas production up to the amount specified by applicable rules for a proration unit for a vertical well plus the additional acreage assignment as provided in this paragraph.
Attached Graphic
  (2) Assignment of acreage to proration and drilling units for horizontal drainhole wells shall comply with §3.40 of this title (relating to Assignment of Acreage to Pooled Development and Proration Units).
  (3) All proration and drilling units shall consist of continuous and contiguous acreage and proration units shall consist of acreage that can be reasonably considered to be productive of oil or gas.
  (4) The maximum daily allowable assigned to a horizontal well shall comply with the table in subsection (d)(1) of this section and the maximum daily allowable specified by paragraph (5) of this subsection, unless special field rules specify different requirements for acreage or maximum daily allowable.
  (5) The maximum daily allowable for a horizontal drainhole well in a designated UFT field shall be 100 barrels of oil for each acre that is assigned to an oil well for allowable purposes, or 600 Mcf of gas for each acre that is assigned to a gas well for allowable purposes. This paragraph does not affect suspension of the allocation formula under §3.31(j) of this title (relating to Gas Reservoirs and Gas Well Allowable). The maximum daily allowable for a horizontal drainhole well in a field that has not been designated as a UFT field shall be determined by multiplying the applicable allowable for a vertical well in the field with a proration unit containing the maximum acreage authorized by the applicable rules for the field, exclusive of tolerance acreage, by a fraction:
    (A) the numerator of which is the acreage assigned to the horizontal drainhole well for proration purposes; and
    (B) the denominator of which is the maximum acreage authorized by the applicable field rules for proration purposes, exclusive of tolerance acreage. The daily oil allowable shall be adjusted in accordance with §3.49(a) of this title (relating to Gas-Oil Ratio), when applicable.
Cont'd...