PART 241-ACQUISITION AND LEASING OF WATER WELLS

Sec. 241.1 Secretary of the Interior may take over, purchase casing in, and condition wells for water production. 241.2 Wells drilled prior to or after act of June 16, 1934 under permits issued prior to said act; development of water in wells drilled by persons not in privity with permittees or lessees.

241.3 Provisions of act of June 16, 1934;

where inapplicable.

241.4 Federal oil and gas supervisor to submit report before approving notice of intention to abandon any well not excluded in § 241.3. 241.5 Geological Survey to determine value of water.

241.6 Application for, and award of lease to, water well.

241.7 Funds available for plugging and abandonment, available for conditioning, maintenance and development of water supplies.

AUTHORITY: The provisions of this Part 241 issued under sec. 32, 41 Stat. 450, sec. 40, 48 Stat. 977; 30 U.S.C. 189, 229a.

SOURCE: The provisions of this Part 241 contained in Regulations, Oct. 23, 1934, unless otherwise noted.

CROSS REFERENCE: For Bureau of Land Management regulations relating to water reserves, see 43 CFR Part 292.

§ 241.1

Secretary of the Interior may take over, purchase casing in, and condition wells for water production. Under the provisions of the act of June 16, 1934 (48 Stat. 977; 30 U. S. C. 229a), amending the act of February 25, 1920 (41 Stat. 441-445; 30 U. S. C. 221, 223228), all oil and gas permits and leases issued after June 16, 1934, are subject to the authority of the Secretary of the Interior to take over, purchase necessary casing in, and condition for water production any well drilled which strikes water of value for any of the uses named in the act: Provided, That the taking over of such well will not restrict operations under the permit or lease. § 241.2

Wells drilled prior to or after act of June 16, 1934 under permits issued prior to said act; development of water in wells drilled by persons not in privity with permittees or lessees.

The Secretary of the Interior may also take over and condition wells heretofore or hereafter drilled under permits and

leases previously issued, and may develop water in any wells plugged or abandoned or wells drilled prior to the issuance of permits or leases by persons not in privity with the permittees or lessees. § 241.3

Provisions of act of June 16, 1934; where inapplicable.

The provisions of this act do not apply to wells drilled on lands entered or patented under any of the public land laws with reservation of the oil and gas deposits since any water developed in such lands does not belong to the United States.

§ 241.4 Federal oil and gas supervisor to submit report before approving notice of intention to abandon any well not excluded in § 241.3.

Before approving any notice of intention to abandon any well on land not excluded in § 241.3, which well is known or believed to contain water of such quality and quantity as to be valuable and usable at a reasonable cost for agricultural, domestic, or other purposes, the Federal oil and gas supervisor having jurisdiction will submit a report to the Director of the Geological Survey, containing information as to the location of the well by legal subdivision of the public land survey, the depth to water, the yield, if determinable, the suitability of the water for irrigation, stock, domestic, or other beneficial use, the amount and reasonable value of casing to be purchased, the nature and estimated cost of repairs to condition the well as a source of water, the existing and prospective markets for the water, and any other pertinent factors bearing on a determination of the economic value of the water supply available. A similar report will be made by the supervisor as to other existing wells or plugged or abanoned wells coming within the purview of the act.

§ 241.5 Geological Survey to determine value of water.

Upon receipt of this report the Geological Survey will determine the value of the water for any of the purposes stated in section 40 of the act. If the water is found to be valuable and usable at a reasonable cost for any of the purposes specified in the act, the land subdivision which contains the well will, if subject thereto, be held to be withdrawn

ly Executive Order of April 17, 1926,1 and reserved for public use pursuant to section 10 of the act of December 29, 1916 (39 Stat. 862; 43 U.S.C. 300), as a water hole. If the water is found not to be valuable and usable at a reasonable cost for any of the purposes specified in the act, the oil and gas supervisor will be directed to authorize proper abandonment of the well.

§ 241.6 Application for, and award of lease to, water well.

When the oil and gas supervisor recommends that a well be preserved as a source of water he will notify the register of the appropriate district land office of such recommendation and of the land subdivision specifically involved. Upon receipt of such notice the regis

1 Executive Order of Withdrawal, dated April 17, 1926, and designated as "Public Water Reserve No. 107" reads, as follows: "Under and pursuant to the provisions of the act of Congress approved June 25, 1910 (36 Stat. 847), entitled 'An Act to authorize the President of the United States to make withdrawals of public lands in certain cases', as amended by act of Congress approved August 24, 1912 (37 Stat. 497), it is hereby ordered that every smallest legal subdivision of the public land surveys which is vacant unappropriated unreserved public land and contains a spring or water hole, and all land within one-quarter of a mile of every spring or water hole located on unsurveyed public land be, and the same is hereby, withdrawn from settlement, location, sale or entry, and reserved for public use in accordance with the provisions of section 10 of the act of December 29, 1916 (39 Stat. 862), and in aid of pending legislation."

ter will note the same on the tract books and will thereafter allow no filing or entry for the subdivision involved until otherwise directed by the Director, Bureau of Land Management. When a well found subject to the act has been duly conditioned for use under the direction of the oil and gas supervisor, when title to the necessary casing has been duly vested in the United States, and when decision to lease rather than to operate has been reached, the register will be directed to receive applications for lease of the requisite premises and water involved. Such applications, including preference claims asserted under section 40 (c) (48 Stat. 977; 30 U. S. C. 229a), will be submitted in regular course to the Bureau of Land Management where preference rights will be determined and an appropriate lease for the use of the water will be prepared for award by the Secretary of the Interior to such applicant as he shall determine to be equitably entitled thereto. The effective period of the lease, and the terms and conditions thereof, shall be determined by the Secretary of the Interior.

§ 241.7 Funds available for plugging and abandonment, available for conditioning, maintenance and development of water supplies.

Funds available to the Geological Survey for the plugging and abandonment of wells shall be available for the purchase of casing and other necessary equipment contemplated by the act, for the conditioning and maintenance of water wells, and for the development of water supplies in abandoned wells found subject to the provisions of the act.

Regulation of operations.

250.13 Temporary approvals.

250.14 Samples, tests, and surveys. 250.15 Drilling and abandonment of wells. 250.16 Well potentials and permissible flow. 250.17 Well-spacing and well-casing. 250.18 Rights of use and easement. 250.19 Rentals, royalties, and other payments.

250.20 Suspension of operations and production.

REQUIREMENT FOR LESSEES

250.30 Lease terms, regulations,

damage, and safety.

250.31

Designation of operator.

250.32

Local agent.

waste,

250.33 Drilling and producing obligations. 250.34 Drilling and development programs. 250.34a Extension of leases by drilling or well

REPORTS TO BE MADE BY ALL LESSEES (INCLUDING OPERATORS)

250.90 General requirements.

250.91

Sundry notices and reports on wells.

250.92 Log and history of well.

250.93 Monthly report of operations.

250.94 Statement of oil and gas runs and

250.95

250.96

royalties.

Special forms or reports.
Waiver on filing reports.

MINERAL LEASES AFFECTED BY SECTION 6 OF OUTER CONTINENTAL SHELF LANDS ACT 250.100 Effect of regulations on provisions of lease.

AUTHORITY: The provisions of this Part 250 issued under secs. 5, 6, 67 Stat. 464, 465; 43 U.S.C. 1334, 1335.

SOURCE: The provisions of this Part 250 appear at 19 F.R. 2656, May 8, 1954, unless otherwise noted.

CROSS REFERENCE: For further regulations pertaining to the issuance and recognition of mineral leases covering submerged lands in the outer Continental Shelf, see 43 CFR Part 201.

§ 250.1

GENERAL PROVISIONS

Purpose and authority.

The Outer Continental Shelf Lands Act enacted on August 7, 1953 (67 Stat. 462), referred to in this part as "the act," authorizes the Secretary of the Interior to prescribe rules and regulations applicable to operations conducted under a lease issued or maintained under the provisions of the act, and for the prevention of waste, the conservation of natural resources of the outer Continental Shelf, and the protection of correlative rights therein. The regulations in this part shall be administered by the Director of the Geological Survey.

NOTE: Compliance with the regulations of this part does not obviate the necessity of compliance with requirements and regulations of the Department of the Army and the Coast Guard with respect to prevention of obstruction to navigation, lights, and warning devices, and other matters relating to safety of life and property, as authorized by section 4 of the act.

The following terms as used in the regulations in this part shall have the meanings here given:

(a) Secretary. The Secretary of the Interior.

(b) Director. The Director of the Geological Survey, Washington, D. C., having administrative direction of the enforcement of the regulations in this part.

(c) Supervisor. A representative of the Secretary, under administrative direction of the Director, authorized and empowered to regulate operations and to perform other duties prescribed in the regulations in this part, or any subordinate of such representative acting under his direction.

(d) Outer Continental Shelf. All submerged lands (1) which lie seaward and outside of the area of lands beneath navigable waters as defined in the Submerged Lands Act (67 Stat. 29) and (2) of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.

(e) Lease. The contract or agreement under which the leasehold rights are held by the lessee, or the land covered by the contract or agreement, whichever is required by the context.

(f) Lessee. The party authorized by a lease, or an approved assignment thereof, to develop and produce the leased deposits in accordance with the regulations in this part, including all parties holding such authority by or through him.

(g) Operator. The individual, partnership, firm, or corporation having control or management of operations on the leased land or a portion thereof. The operator may be a lessee, designated agent of the lessee, or holder of rights under an approved operating agreement.

(h) Waste of oil and gas. Waste means and includes (1) physical waste as that term is generally understood in the oil and gas industry; (2) the inefficient, excessive, or improper use of, or the unnecessary dissipation of reservoir energy; (3) the locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recov

erable from a pool under prudent and proper operations or which causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas; (4) the inefficient storage of oil; and (5) the production of oil or gas in excess of transportation or marketing facilities or in excess of reasonable market demand.

(i) Directional drilling. The deviation of a bore hole from the vertical or from its normal course in an intended predetermined direction or course with respect to the points of the compass. Directional drilling shall not include deviations made for the purpose of straightening a hole that has become crooked in a normal course of drilling or deviating a hole at random without regard to compass direction in an attempt to sidetrack a portion of the hole on account of mechanical difficulty in drilling. JURISDICTION AND FUNCTIONS OF SUPERVISOR

§ 250.10 Jurisdiction.

Drilling and production operations, handling and measurement of production, determination and collection of rental and royalty, and, in general, all operations subject to the regulations in this part are under the jurisdiction of the supervisor for any district as delineated by the Director.

§ 250.11 General functions.

The supervisor is authorized to act upon the requests, applications, and notices made or given by an operator or lessee under the regulations in this part and to require compliance with lease terms, with the regulations in this part and all other applicable regulations, and with applicable law to the end that all operations shall conform to sound conservation practice and shall be conducted in such manner as to protect the natural resources of the outer Continental Shelf and result in their maximum economic recovery. After appropriate hearings, the supervisor may establish field rules to govern the development and method of production of a pool, field, or area. The supervisor may require satisfactory evidence that a lease is in good standing, that the lessee or operator is authorized to conduct operations, and that an acceptable bond has been filed before permitting operations on the leased land.

§ 250.12

Regulation of operations.

(a) Duties of supervisor. The supervisor shall inspect and regulate operations under the regulations in this part and shall issue orders and rules necessary, in his judgment, to prevent damage, or waste of any natural resource, or injury to life or property.

(b) Emergency suspensions. The supervisor is authorized to require a lessee by written notice to suspend any operation or method of operation which endangers life or threatens immediate, serious, or irreparable damage to the leased deposits or other valuable mineral deposits.

§ 250.13 Temporary approvals.

Whenever the regulations in this part require a lessee to obtain approval of the supervisor, the lessee may make an oral or telegraphic request for such approval, and the supervisor may give such oral or telegraphic approval as may be warranted: Provided, That the transaction shall forthwith be confirmed in the manner otherwise required by the regulations in this part.

§ 250.14 Samples, tests, and surveys.

(a) When deemed necessary or advisable, the supervisor is authorized to require that adequate tests or surveys be made in an acceptable manner without cost to the lessor to determine the reservoir energy; the presence, quantity, and quality of oil, gas, sulphur, other mineral deposits, or water; the amount and direction of deviation of any well from the vertical; or the formation, casing, tubing, or other pressures.

(b) The supervisor may, at the time of approval of any notice to drill or redrill any well, stipulate reasonable requirements for the taking of formation samples or cores to determine the identity and character of any formation. § 250.15 Drilling and abandonment of wells.

The supervisor shall demand drilling in accordance with the terms of the lease and of the 1egulations in this part; and shall require plugging and abandonment, in accordance with such plan as may be approved or prescribed by him, of any well no longer used or useful, and upon failure to secure compliance with such requirement, perform the work at the expense of the lessee, expending available public funds, and

The supervisor is authorized to specify the time and method for determining the potential capacity of any well and to fix, after appropriate notice, the permissible production of any such well that may be produced when such action is necessary to prevent waste or to conform with such proration rules, schedules, or procedures as may be established by the Secretary.

§ 250.17 Well-spacing and well-casing.

(a) The supervisor shall approve well locations and well-spacing and -casing programs determined to be necessary for the proper development of the lease, giving due consideration to the location of drilling platforms, the geological and reservoir characteristics of the field, and the number of wells that can be economically drilled.

(b) The supervisor may approve irregular spacing of wells and development plans providing for a predetermined number of wells to be drilled and abandoned when required for the proper exploration and development of sulphur deposits.

§ 250.18 Rights of use and easement.

(a) In addition to the rights and privileges granted to a lessee under any lease issued or maintained under the act, the supervisor may grant such lessee, subject to such reasonable conditions as said supervisor may prescribe, the right of use or an easement to construct and maintain platforms, fixed structures, and artificial islands, and to use the same for carrying on operations, including drilling, directional drilling, producing, treating, handling, and storing production, and housing personnel engaged in operations, not only in connection with the lease on which the platform, structure, or island, is situated, but for the conduct of operations on any other lease, State or Federal.

(b) The supervisor may grant to a holder of a Federal or State lease the right of use or an easement to construct and maintain platforms, fixed structures, and artificial islands on areas of the outer Continental Shelf, near or adjacent to the leased area, and to use same