Directive 065: Resources Applications for Oil and Gas Reservoirs ...

commingling a minimum of 15 working days prior to when it is anticipated the well would be
completed for commingled production. This notice must be provided regardless of whether
the lessee ownership is common or pooled within the spacing unit. The notice should provide
that any concerns regarding the proposed completion are to be filed with the licensee. The
licensee must make efforts to address the concerns raised to the satisfaction of the lessor(s)
prior to completing the well. If the licensee is unable to resolve the matters raised by the
lessor(s), the production from the well may not be commingled using the DE or SD process.
If commingling of production is desired in this situation, an application in accordance with
Section 3.1.8 of Directive 065 must be submitted. Any licensee making such an application
will be required to address issues raised by the Freehold mineral lessor(s).
If the above-noted lessor ownership situation does not exist, a licensee is not required to
provide advance notice to any party that it is proposing to commingle production in the
wellbore.
Notice of Commingling Using the DE or SD Process After Completing the Well
A licensee that has commingled production using the DE or SD process must provide notice
of the commingling, at the minimum, to the licensees of all wells, other than abandoned
wells, and to all Freehold mineral lessors in the section to be commingled and the eight DSUs
immediately offsetting the well in which commingling has occurred. In addition, the licensee
must make a judgement as to whether parties outside specified areas could be potentially
directly and adversely affected and, if so, provide notification to those parties also.
Notice is to be provided within 30 days from the onset of commingling.
Disputes Regarding Commingling Under the DE or SD Process
If any dispute arises with an offsetting licensee as to whether the commingling should have
occurred, the parties should attempt to resolve the issue through negotiation, appropriate
dispute resolution, and other mutually acceptable means. If the dispute is not resolved, either
party may contact the ERCB for resolution. After review of the matter, the ERCB may
require that production in the well under dispute be segregated.
Although it would normally be expected that any concerns raised in response to notice of
commingling would be brought forward by Freehold mineral lessors or licensees with an
interest within the area of notice, concerns raised by parties outside of that area must also be
addressed. If the ERCB were asked to make a decision in such a case, it would consider the
arguments brought forward on their own merits and would not automatically reject the
concerns raised solely because the objecting party’s interests are located outside of the notice
area.
b) Varying Interests
Potential DE or SD well candidates that have varying ownership or royalty interests in the
DSU must not commence commingled production unless all parties involved in the DSU
have agreed. Licensees should be aware that well spacing may not be the same for all zones.
c) Off-target Wells
Commingling of production in the wellbore may also be an issue if a well is off target,
because commingling will affect the licensee’s ability to obtain segregated pool data, which
in turn may adversely affect the ability of offsetting licensees to determine the possible
effects of the off-target well. For example, the offsetting licensee may not be able to
ERCB Directive 065: Resources Applications / Commingled Production (October 2011) • 3-17