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PART 241-ACQUISITION AND LEAS- leases previously issued, and may develop ING OF WATER WELLS

water in any wells plugged or abandoned Sec.

or wells drilled prior to the issuance of 241.1 Secretary of the Interior may take permits or leases by persons not in priv

over. purchase casing in, and condi- ity with the permittees or lessees.

tion wells for water production. 241.2 Wells drilled prior to or after act of

8 241.3 Provisions of act of June 16, June 16, 1934 under permits issued

1934; where inapplicable. prior to said act; development of

The provisions of this act do not apply water in wells drilled by persons

to wells drilled on lands entered or patnot in privity with permittees or lessees.

ented under any of the public land laws 241.3 Provisions of act of June 16, 1934;

with reservation of the oil and gas dewhere inapplicable.

posits since any water developed in such 241.4 Federal oil and gas supervisor to sub- lands does not belong to the United

mit report before approving notice States.
of intention to abandon any well
not excluded in § 241.3.

§ 241.4 Federal oil and gas supervisor 241.5 Geological Survey to determine value

to submit report before approving of water. 241.6 Application for, and award of lease

notice of intention to abandon any to, water well.

well not excluded in § 241.3. 241.7 Funds avallable for plugging and Before approving any notice of in

abandonment, avallable for condi- tention to abandon any well on land tioning, maintenance and develop- not excluded in § 241.3, which well is ment of water supplies.

known or believed to contain water of AUTHORITY: The provisions of this part 241 such quality and quantity as to be valuissued under sec. 32, 41 Stat. 450, sec. 40, 48 able and usable at a reasonable cost for Stat. 977; 30 U.S.C. 189, 229a.

agricultural, domestic, or other purposes, SOURCE: The provisions of this part 241 the Federal oil and gas supervisor havcontained in Regulations, Oct. 23, 1934, un- ing jurisdiction will submit a report to less otherwise noted.

the Director of the Geological Survey, CROSS REFERENCE: For Bureau of Land

containing information as to the locaManagement regulations relating to water tion of the well by legal subdivision of reserves, see 48 CFR Part 292.

the public land survey, the depth to

water, the yield, if determinable, the § 241.1 Secretary of the Interior may

suitability of the water for irrigation, take over, purchase casing in, and condition wells for water production.

stock, domestic, or other beneficial use,

the amount and reasonable value of casUnder the provisions of the act of June ing to be purchased, the nature and esti16, 1934 (48 Stat. 977; 30 U. S. C. 229a), mated cost of repairs to condition the amending the act of February 25, 1920 well as a source of water, the existing (41 Stat. 441-445; 30 U. S. C. 221, 223– and prospective markets for the water, 228), all oil and gas permits and leases and any other pertinent factors bearing issued after June 16, 1934, are sub- on a determination of the economic value ject to the authority of the Secretary of the water supply available. A similar of the Interior to take over, purchase report will be made by the supervisor as necessary casing in, and condition for to other existing wells or plugged or water production any well drilled which abanoned wells coming within the purstrikes water of value for any of the uses view of the act. named in the act: Provided, That the taking over of such well will not restrict § 241.5 Geological Survey to determine operations under the permit or lease.

value of water. § 241.2 Wells drilled prior to or after Upon receipt of this report the Geo

act of June 16, 1934 under permits logical Survey will determine the value issued prior to said act; development of the water for any of the purposes of water in wells drilled by persons stated in section 40 of the act. If the not in privity with permittees or water is found to be valuable and usable lessees.

at a reasonable cost for any of the purThe Secretary of the Interior may also poses specified in the act, the land subtake over and condition wells heretofore division which contains the well will, if or hereafter drilled under permits and subject thereto, be held to be withdrawn ly Executive Order of April 17, 1926," ter will note the same on the tract and reserved for public use pursuant to books and will thereafter allow no section 10 of the act of December 29, filing or entry for the subdivision in1916 (39 Stat. 862; 43 U.S.C. 300), as a

volved until otherwise directed by the water hole. If the water is found not Director, Bureau of Land Management. to be valuable and usable at a reasonable When & well found subject to the cost for any of the purposes specified in act has been duly conditioned for use the act, the oil and gas supervisor will under the direction of the oil and gas be directed to authorize proper abandon- supervisor, when title to the necessary ment of the well.

casing has been duly vested in the

United States, and when decision to lease § 241.6 Application for, and award of lease to, water well.

rather than to operate has been reached,

the register will be directed to receive When the oil and gas supervisor rec- applications for lease of the requisite ommends that a well be preserved as a premises and water involved. Such source of water he will notify the regis- applications, including preference claims ter of the appropriate district land of- asserted under section 40 (c) (48 Stat. fice of such recommendation and of the 977; 30 U. S. C. 229a), will be submitted land subdivision specifically involved. in regular course to the Bureau of Land Upon receipt of such notice the regis- 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 1 Executive Order of Withdrawal, dated the Interior to such applicant as he shall April 17, 1926, and designated as “Public determine to be equitably entitled thereWater Reserve No. 107" reads, as follows:

to. The effective period of the lease, and "Under and pursuant to the provisions of

the terms and conditions thereof, shall the act of Congress approved June 25, 1910

be determined by the Secretary of the (36 Stat. 847), entitled 'An Act to author

Interior. ize the President of the United States to make withdrawals of public lands in certain

§ 241.7 Funds available for plugging cases', as amended by act of Congress ap

and abandonment, available for conproved August 24, 1912 (37 Stat. 497), it is

ditioning, maintenance and develophereby ordered that every smallest legal

ment of water supplies. subdivision of the public land surveys which 18 vacant unappropriated unreserved public Funds available to the Geological Surland and contains & spring or water hole, vey for the plugging and abandonment and all land within one-quarter of a mile

of wells shall be available for the purof every spring or water hole located on un

chase of casing and other necessary surveyed public land be, and the same is hereby, withdrawn from settlement, location,

equipment contemplated by the act, for sale or entry, and reserved for public use in

the conditioning and maintenance of accordance with the provisions of section water wells, and for the development of 10 of the act of December 29, 1916 (39 Stat. water supplies in abandoned wells found 862), and in aid of pending legislation." subject to the provisions of the act.


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JURISDICTION AND FUNCTIONS OF SUPERVISOR 250.10 Jurisdiction. 250.11 General functions. 250.12 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 pay

250.80 Default.
250.81 Appeals.
250.82 Judicial review.

(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

royalties. 250.95 Special forms or reports. 250.96 Waiver on fling 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.

GENERAL PROVISIONS $ 250.1 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 appli. cable to operations conducted under & 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.

ments. 250.20 Suspension of operations and pro


REQUIREMENT FOR LESSEES 250.30 Lease terms, regulations, waste,

damage, and safety. 250.31 Designation of operator. 250.32 Local agent. 250.33 Drilling and producing obligations. 250.34 Drilling and development programs. 250.34a Extension of leases by drilling or well

reworking. 250.35 Subsequent well operations. 250.36 Well designations. 250.37 Well records. 250.38 Samples, tests, and surveys. 250.39 Directional survey. 250.40 Control of wells. 250.41 Emulsion and dehydration. 250.42 Pollution. 250.43 Well abandonment. 250.44 Accidents and fires. 250.45 Workmanlike operations. 250.46 Sales contracts. 250.47 Division orders. 250.48 Royalty and rental payments.


COMPUTATION OF ROYALTIES 250.60 Measurement of oil. 250.61 Measurement of gas. 250.62 Determination of content of gas. 250.63 Quantity basis for substances ex

tracted from gas. 250.64 Value basis for computing royalties. 250.65 Royalty on oil. 250.66 Royalty on unprocessed gas. 250.67 Royalty on processed gas. 250.68 Commingling production. 250.69 Measurement of sulphur.

$ 250.2 Definitions.

erable from a pool under prudent and

proper operations or which causes or The following terms as used in the

tends to cause unnecessary or excessive regulations in this part shall have the surface loss or destruction of oil or gas; meanings here given:

(4) the inefficient storage of oil; and (5) (a) Secretary. The Secretary of the

the production of oil or gas in excess of Interior.

transportation or marketing facilities or (b) Director. The Director of the in excess of reasonable market demand. Geological Survey, Washington, D. C., (1) Directional drilling. The deviahaving administrative direction of the tion of a bore hole from the vertical or enforcement of the regulations in this from its normal course in an intended part.

predetermined direction or course with (c) Supervisor. A representative of

respect to the points of the compass. the Secretary, under administrative di- Directional drilling shall not include rection of the Director, authorized and deviations made for the purpose of empowered to regulate operations and to straightening a hole that has become perform other duties prescribed in the crooked in a normal course of drilling or regulations in this part, or any subor- deviating a hole at random without redinate of such representative acting gard to compass direction in an attempt under his direction.

to sidetrack a portion of the hole on ac(d) Outer Continental Shelf. All sub- count of mechanical difficulty in drilling. merged lands (1) which lie seaward and

JURISDICTION AND FUNCTIONS OF outside of the area of lands beneath

SUPERVISOR navigable waters as defined in the Submerged Lands Act (67 Stat. 29) and (2) 8 250.10 Jurisdiction. of which the subsoil and seabed apper

Drilling and production operations, tain to the United States and are subject

handling and measurement of producto its jurisdiction and control.

tion, determination and collection of (e) Lease. The contract or agree

rental and royalty, and, in general, all ment under which the leasehold rights

operations subject to the regulations in are held by the lessee, or the land cov

this part are under the jurisdiction of the ered by the contract or agreement,

supervisor for any district as delineated whichever is required by the context.

by the Director. (f) Lessee. The party authorized by a lease, or an approved assignment there- $ 250.11 General functions. of, to develop and produce the leased The supervisor is authorized to act deposits in accordance with the regula- upon the requests, applications, and notions in this part, including all parties tices made or given by an operator or holding such authority by or through lessee under the regulations in this part him.

and to require compliance with lease (g) Operator. The individual, part- terms, with the regulations in this part nership, firm, or corporation having con- and all other applicable regulations, and trol or management of operations on the with applicable law to the end that all leased land or a portion thereof. The operations shall conform to sound conoperator may be a lessee, designated servation practice and shall be conducted agent of the lessee, or holder of rights in such manner as to protect the natural under an approved operating agreement. resources of the outer Continental Shelf

(h) Waste of oil and gas. Waste and result in their maximum economic means and includes (1) physical waste as recovery. After appropriate hearings, that term is generally understood in the

the supervisor may establish field rules oil and gas industry; (2) the inefficient,

to govern the development and method excessive, or improper use of, or the un- of production of a pool, field, or area. necessary dissipation of reservoir energy;

The supervisor may require satisfactory (3) the locating, spacing, drilling, equip- evidence that a lease is in good standing, ping, operating, or producing of any oil that the lessee or operator is authorized or gas well or wells in a manner which to conduct operations, and that an accauses or tends to cause reduction in the ceptable bond has been filed before perquantity of oil or gas ultimately recov- mitting operations on the leased land.

$ 250.12 Regulation of operations. submit such report as may be Leeded to (a) Duties of supervisor. The super

furnish a basis for appropriate action to visor shall inspect and regulate opera

obtain reimbursement. tions under the regulations in this part

8 250.16 Well potentials and permissiand shall issue orders and rules neces

ble flow. sary, in his judgment, to prevent damage, or waste of any natural resource, or in

The supervisor is authorized to specjury to life or property.

ify the time and method for determin(b) Emergency suspensions. The su

ing the potential capacity of any well pervisor is authorized to require a lessee and to fix, after appropriate notice, the by written notice to suspend any opera

permissible production of any such well tion or method of operation which en- that may be produced when such acdangers life or threatens immediate, tion is necessary to prevent waste or to serious, or irreparable damage to the

conform with such proration rules, leased deposits or other valuable mineral schedules, or procedures as may be esdeposits.

tablished by the Secretary. $ 250.13 Temporary approvals.

$ 250.17 Well-spacing and well-casing. Whenever the regulations in this part

(a) The supervisor shall approve well require a lessee to obtain approval of the

locations and well-spacing and -casing supervisor, the lessee may make an oral programs determined to be necessary or telegraphic request for such approval, for the proper development of the lease, and the supervisor may give such oral giving due consideration to the location or telegraphic approval as may be war

of drilling platforms, the geological and ranted: Provided, That the transaction

reservoir characteristics of the field, and shall forthwith be confirmed in the man

the number of wells that can be economner otherwise required by the regula

ically drilled. tions in this part.

(b) The supervisor may approve ir$ 250.14 Samples, tests, and surveys.

regular spacing of wells and development

plans providing for a predetermined (a) When deemed necessary or advis- number of wells to be drilled and abanable, the supervisor is authorized to re- doned when required for the proper exquire that adequate tests or surveys be ploration and development of sulphur made in an acceptable manner without deposits. cost to the lessor to determine the reser

$ 250.18 Rights of use and easement. voir energy; the presence, quantity, and q'iality of oil, gas, sulphur, other mineral

(a) In addition to the rights and privideposits, or water; the amount and direc- leges granted to a lessee under any lease tion of deviation of any well from the

issued or maintained under the act, the vertical; or the formation, casing, tubing,

supervisor may grant such lessee, subject or other pressures.

to such reasonable conditions as said su(b) The supervisor may, at the time

pervisor may prescribe, the right of use of approval of any notice to drill or or an easement to construct and mainredrill any well, stipulate reasonable

tain platforms, fixed structures, and arrequirements for the taking of formation tificial islands, and to use the same for samples or cores to determine the iden. carrying on operations, including drilltity and character of any formation.

ing, directional drilling, producing, treat

ing, handling, and storing production, $ 250.15 Drilling and abandonment of

and housing personnel engaged in operawells.

tions, not only in connection with the The supervisor shall demand drill- lease on which the platform, structure, ing in accordance with the terms of or island, is situated, but for the conduct the lease and of the regulations in this of operations on any other lease, State or part; and shall require plugging and Federal. abandonment, in accordance with such (b) The supervisor may grant to a plan as may be approved or prescribed holder of a Federal or State lease the by him, of any well no longer used or right of use or an easement to construct useful, and upon failure to secure com- and maintain platforms, fixed structures, pliance with such requirement, perform and artificial islands on areas of the the work at the expense of the lessee, outer Continental Shelf, near or adjaexpending available public funds, and cent to the leased area, and to use same

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