3137.64 As a unit operator, what must I do to prevent or compensate for drainage§ 3137.64 As a unit operator, what must I do to prevent or compensate for drainage?
You must prevent uncompensated drainage of oil and gas from unit land by wells on land not subject to the unit agreement. Permissible means of satisfying the obligation include -
(a) Drilling a protective well if it is economically feasible. For this subpart, economically feasible means producing a sufficient quantity of oil or gas from a protective well in the unit for a reasonable profit above the cost of drilling, completing and operating the protective well;
(b) Paying compensatory royalty;
(c) Forming other agreements, or modifying existing agreements, that allow the tracts committed to the unit agreement to share in production after the effective date of the new or modified agreement; or
(d) BLM may require additional measures to prevent uncompensated drainage.