Ten Acres or What?

Although KCC regulations require 10 acres for a drilling unit and 330 feet between a well and a lease line, in Eastern Kansas we’ve been drilling on 2.5 acre spacing for decades. This was based on another KCC regulation that specified in this part of the state a well only had to be 165 feet from the lease line. If that’s the “radius” from the well bore, the diameter would be 330 feet and, if a square, 330′ x 330′ makes 2.5 acres. However, the same regulation did not go on to say that, although a well only had to be 165 feet from the line, wells could be drilled on 2.5 acre spacing. Now, suddenly, the KCC is starting to require operators to apply for “well location exceptions” if they want to drill  on less than 10 acre spacing. The trouble is, Eastern Kansas is stripper well country and if you can only drill one well per 10 acres, you may not get enough oil to make “paying quantities” which is required to keep the lease alive (held by production). Even if an operator can get paying quantities, with production being cut 75%, who’s going to want to develop and operate in these parts? This suits a lot people fine because they don’t want oil wells around these parts, anyway. They aren’t thinking, of course, about all the tax revenues the counties get from that unwanted oil. Maybe without all those pumps clogging up the surface there’ll be more development of housing and commercial buildings that will generate more real estate taxes to make up for the loss of oil taxes. One thing seems certain, the landscape is in flux, and the future of oil in Eastern Kansas is uncertain.