HomeMy WebLinkAbout08879 ORD - 05/29/1968• Y. J° _ v
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AN ORDINANCE
ADOPTING RULES AND REGULATIONS FOR EXPLORATION,
DRILLING AND PRODUCTION OF HYDROCARBONS, AND :•
CONCERNING MATTERS INCIDENT THERETO, IN THE "•
CITY OF CORPUS CHRISTI, FOR ALL AREAS OF THE ,
CITY EXCEPT THOSE AREAS SUBJECT TO REGULATION
UNDER THE TERMS OF ORDINANCE No. 8294,'ADOPTED
ON FINAL READING ON DECEMBER 21, 1966, AND
AMENDMENTS THERETO; PROVIDING FOR THE CONTINUANCE ,
OF CERTAIN PROVISIONS OF THE EXISTING ORDINANCE;
PROVIDING A SEVERABILITY CLAUSE; PROVIDING AN
EFFECTIVE DATE; AND PROVIDING PENALTIES AND MEANS
OF ENFORCEMENT; AND PROVIDING FOR PUBLICATION.'
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
TEXAS:
SECTION 1. STATEMENT OF PURPOSE AND SCOPE OF ORDINANCE
1.1 Purpose. The City Council of the City of Corpus Christi,
Texas,, finds that there has been drilling and production operations for oil
and gas within the corporate limits of the City of Corpus Christi, and that
there is a likelihood of drilling and production operations and other oper-
ations incident to exploration, drilling and production, and incident to the
existence of such operations, which should be regulated because of the fire
hazards created by such operations, as well as the menace of unsanitary con-
ditions, noise and possibility of injury to persons and property and threats i
to the health, safety and welfare of the public in general, for which the
police power of the State which is delegated to this City, is to be and is
hereby invoked, in aid of the enforcement of this Ordinance.
1.2 Scope. This Ordinance shall govern the exploration, drilling
and production of hydrocarbons and matters incident thereto, in "all areas of
the City except those areas subject to regulations under the terms of Ordinance
No. 8294 adopted on final reading on December 21, 1966, and amendments thereto.
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1.3 Repeal of Prior Ordinances: Ordinance No. 2818, passed and
approved by the City'Council on the 11th day of July 1960, as amended, is
hereby repealed except as'to,such provisions thereof as are carried forward
and continued in effect by the adoption of'this Ordinance. All prior ordinances
in conflict herewith are repealed to'the extent of such conflict.
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1.4 Continuation of Prior Ordinances. This Ordinance is
intended to supercede and displace the previous existing ordinance,
but all conditions in violation of the previous ordinance shall never-
theless be punishable under said Ordinance. All permits issued under
the previous Ordinance shall continue valid unless and until the per -
mittee shall have violated the terms of said permit or the terms of
this Ordinance.
SECTION 2. DEFINITIONS.
For the purposes of this Ordinance, the following words and
phrases shall have the scope and meaning herein ascribed to them.
2.1 A.P.I. The letters "A.P.I." shall mean the American ;
Petroleum institute.
2.2 Applicant. The term "Applicant" means any person who
applies for a permit under the provisions of this Ordinance.
2.3 Bay Drilling Ordinance. The Ordinance adopted December 21,
1966, No. 8294 and amendments thereto, are herein referred to as "Bay
Drilling Ordinance ".
2.4 City Officials. The terms "Mayor ", "City Manager ", "City
Council ", "Council ", and "City Secretary ", refer to those officers of the
City of Corpus Christi, Texas, unless otherwise expressly indicated.
2.5 City Petroleum Superintendent. The term "City Petroleum' _
Superintendent" means the head of the Division of Petroleum Inspection of
the City of Corpus Christi and is sometimes referred to herein as ". .
!'Superintendent".
2.6 Cluster Area. The words "cluster area" sha11' have the ,
meaning specified in subsection 4.8 herevb. r
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2.7 Directional Well. The term "directional well" means a
well drilled from the surface to the bottom thereof with some portion of
the hole intended to have a deviation of more than five (5) degrees from
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2,8 Drilling Block. Those blocks of approximately 40 acres
identified on Exhibit "A" and referred to in subsection 3.1 are herein
referred to as "drilling blocks ",
2.9 Drilling Operation. The term "drilling operation" means
the making of a hole in the earth for the purpose of discovery, explora-
tion or production of oil, gas or minerals.
2.10 Effective Date. The term "effective date" shall mean the
date of final passage of this Ordinance by the City Council,
. 2.10a Exempt Acreage. Same as defined in subsection 3.4 .
2,11 Existing Well, The term "existing well" means a cased
well, or a well in the process of being drilled under a lawful City permit
on the effective date (except as used in subsection 5.17) capable of being
used in oil or gas producing operations, which is not required by this
Ordinance to be plugged, with the exception of the wells described in
paragraphs A, B and C of subsection 6.31; PROVIDED HOWEVER that any ex-
isting well which is subsequently required to be plugged shall not there-
after be considered an existing well,
2.12 Irregular Location. The term "irregular location is the
surface location of any well that is not a regular location.
2,13 Nonnproducing Areas. All drilling blocks on which there are
no existing wells, and which are not exempt from the unitization and well
density provisions hereof, as set forth in subsection 3,4.
2.14 Operator, The term "operator') shall include every person,
and the agents, servants and employees of such person, engaged in operations
for the drilling, reworking, redrilling, well servicing or plugging and
abandonment of any well subject to this Ordinance and the production or
transportation of any product therefrom.
2.15 Permit. The term "permit" means a pert granted pur-
suant to this Ordinance, or in existence and valid under the previous
ordinance at the time of adoption of this Ordinance.
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2.16 Permittee. The term "permittee" is any person holding a
permit granted under this Ordinance, or under a prior ordinance and in
good standing on the effective'date. ,
2.17 Person. The word "person" shall include any natural per-
son, persons or group of persons, whether acting individually, in concert,
or in any representative capacity, and any partnership, private or public
corporation, trust, estate, agency, trustee, executor, administrator,
agent or legal entity.
2.18 Production Unit. Those areas which prior to the adoption
of this Ordinance have been unitized, and also those areas comprising one
or more drilling blocks and /or parts of drilling-blocks which are unitized
after the effective date.
2.19 Railroad Commission. The term "Railroad Commission" or
the letters R.R.C., as used in this Ordinance, shall mean the Railroad
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Commission of Texas.
2.20 Recompletion Operations. Any operation other than a
drilling operation, on an existing well, for which a Form 1 is required
by the R.R.C.:is a recompletion operation.
2.21 Regular Location. The term "regular location" is the sur-
face location of any well for which no variance is required by this
Ordinance.
2.22 Relief Well. The term "relief well" means a well drilled
or adapted under emergency circumstances to correct or safeguard against
unexpected and inherently hazardous conditions.
2.23. Straight Well. The term "straight well" means a well
drilled from the surface to the bottom thereof with no portion of the
hole intended to have a deviation of more than five (5) degrees from vertical.
2.24 Terminology. All words herein having accepted meanings in
the oil and gas industry shall have the same meaning in this Ordinance.
2.25 Unitize. The term "unitize" means the grouping of
mineral interests in a given surface unit for the purpose of producing
hydrocarbons as a unit.
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2.26 Well. The term "well" means any hole, excavation or bore
downward from the surface, intended to extend 200 feet or more into the
subsurface, matte by any means or manner, for the purpose of exploring for,
discovering, producing, or injecting hydrocarbons, water or other mineral,
and which has not been officially plugged and abandoned.
2.27 Well Service Operations. Operations on a well, other
than drilling operations or recompletion operations.
SECTION 3. DRILLING BLOCKS AND PRODUCTION UNITS
3.1 Drilling Blocks. In order that the purpose and intent of
this Ordinance, as stated in Section 1, shall be carried out and future
drilling for oil and gas within the City of Corpus Christi may proceed in
an orderly manner, and for convenience and clarity in identifying the lo-
cation of approved or proposed drilling locations, the area of the Ctty to
which this Ordinance applies (with the exceptions noted in subsection 3.4)
has been divided into drilling blocks, each containing approximately 40 ~
acres. Each block is shown and identified on the map attached hereto as
Exhibit "A ". The exact description of any such drilling block -not already
approved by ordinance prior to the adoption of this Ordinance shall be
determined in the manner provided in subsection 3.3 hereof.
All mineral interests in each drilling block shall be unitized
as herein provided with the exceptions noted in" subsection 3.4. No appli-
cation to drill on any drilling block where all or part is required to be
unitized will be approved unless the applicant shows that he owns or con-
trols by voluntary agreement more than 50% of the total operating rights
in the drilling block, or that portion of the block left after deducting
exempt acreage, to be unitized. No more than one completion shall be made
in any reservoir on any drilling block except under State owned leases
until special field rules have been adopted by the R.R.C., for the reservoir.
The final well density- within each drilling block will be no greater than
that presrxibed by' the :Railroad Commission in, Special Field Rules _zhichY
.may be adopted for the field.
3.2 Submerged and Partially Submerged Areas. Water area under
which the mineral interests are State owned have heretofore been appor-
tioned and given "State Tract" designations. For the purposes of this
Ordinance, each State Tract or portion thereof which lies within the'City
limits of the City of Corpus Christi and which is not regulated by Ordi-
nance No. 8294 (Bay Drilling Ordinance) is hereby designated as a single
drilling block.
3.3 Survey Description of Drilling Blocks. Each applicant is
required by Section S.:of this Ordinance to file with the Superintendent
his application to drill which includes a metes and bounds description of
the drilling block proposed to be covered by the permit. Such metes and
bounds description shall be prepared by a surveyor licensed by the State
of Texas, and shall conform to the extent reasonably possible to the out-
lines of drilling blocks shown on Exhibit "A ". No such metes and bounds
description shall be approved by the Superintendent, unless its outside
boundaries substantially conform to the general pattern shown on Exhibit
"A". When so approved, such description shall become the official legal
description of the drilling block therein for all purposes hereunder. The
Superintendent shall take into account the metes and bounds description of
all previously approved drilling blocks in determining the propriety of the
description furnished in connection with any permit application in order
to obtain ultimate conformity to the pattern shown on Exhibit "A ".
3.4 Exemptions to Unitization and Well Density Requirements.
Exemptions to unitization and well density requirements shall be controlled
by the following rules:
A. Each drilling block as to all depths and all minerals there-
under is exempt from the well density and unitization provisions of this
Ordinance when an existing well, as defined in subsection 2.11 hereof, is
situated thereon and such unitization and density exemption shall continue
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so long as said existing well is not required to be plugged and there-
after shall continue to be exempt if the conditions in paragraph D of
this subsection are met.
B. All or such portion of a drilling block as is included in
a pooled unit with an existing well situated on said unit is exempt and
shall continue exempt after such well is required to be plugged, if the
conditions of paragraph D of this subsection are met.
C. All or such portion of a drilling block which is included
in a pooled unit with an existing well situated on such unit or which is
covered by an oil and gas lease or leases and allocated to an existing
well in which common ownership exists between said well and said lease
or leases is exempt from the well density and unitization provisions of
this Ordinance and such exemption shall continue after the existing well is
required to be plugged if the conditions of paragraph D of this sub-
section are met.
D. Upon a cessation of production in paying quantities from
any existing well (unless the well meets the conditions described in
paragraph D of subsection 6.31) if additional drilling or reworking oper-
ations are commenced on such well or a replacement well is commenced with-
in ninety (90) 'days and prosecuted with no cessation of more than ninety
(90) consecutive days until production of oil, gas. or other mineral is
restored, such production shall continue in effect the exemption from
the well density and unitization provisions of this Ordinance.
E. Wherever, under paragraph B of this subsection, a portion
only of a drilling block is exempt, if the remaining portion of a drilling
block is twenty (20) acres or more it sPaK, thereafter constitute the drill-
ing block. If the remaining portion is less than twenty (20) acres it also
shall be exempt as part of the original drilling block and under the same
conditions.
3.5 Removal of Exemption. When exempt acreage which consti-
tutes only a part of a drilling block no longer meets any condition for
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exemption provided in subsection 3.4, such acreage shall become a part of
the original drilling block out of which it was taken and subject to all
the provisions of this Ordinance; provided,however, that if there is
then a producing well on the remaining part of said original drilling
block, that acreage which was previously exempt shall become part of what-
ever other drilling block to which it is adjacent, with which it has the
longest common boundary and on which there is no producing well or existing
exemption from the well density and unitization provisions of this Ordinance;
and provided further, that if there is no such other adjacent drilling
block, the acreage which has lost its exemption shall become a separately
designated drilling block with the same number as the original number
of the drilling block out of which it was taken but with the letter "F"
following the number.
3.6 Formation of Production Units Larger Than Drilling Blocks.
It is realized that unit areas larger than a drilling block are sometimes
desirable and more beneficial to effectively develop and drain a hydro-
carbon reservoir. To this end it is therefore permissible for an applicant
w or a permittee to form unitized areas, as to specific or all horizons,
larger than the drilling block in which a well has been drilled. After the
effective date, the formation of a production unit which is larger than a
single drilling block will be subject to the following requirements:
A. Such a production unit shall consist of an area which
embraces contiguous entire drilling blocks, within which the operator
shall have more than 50% of the operating rights in each drilling block
included in such production unit.
B, No such production unit will be formed in a manner that will
prevent the inclusion of any adjoining drilling block with other acreage
to form another production unit larger than such adjoining drilling block
unless the operator proposing to form the original production unit pre-
sents evidence reasonably acceptable to the Superintendent that he has A
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given an opportunity to the mineral interest owners in said adjoining
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drilling block by thirty (30) days written notice delivered to or mailed by
certified mail to their last known address offering the option to unitize
their interests with the mineral interests in the production unit proposed
to be formed by him. If the owners of more than fifty per cent (50 %) of the
operating rights, as operating rights are defined in subparagraph 5.21,
hereof, in said drilling block desire to join in said production unit
and execute within said thirty (30) day period pooling agreements on
the same proportionate basis and containing terms and conditions as the
pooling agreements executed by other mineral interest owners in said
production unit, such adjoining drilling block shall become a part of
the production unit. If fifty per cent (50 %) or less of the mineral
interest owners in said adjoining drilling block execute such pooling
agreements within said time, the same shall not be required to be
included within the production unit proposed to be formed by the operator.
C. All mineral interests in each production unit, whether the
production unit consists of a single drilling block or more than one
drilling block, shall be unitized as herein provided as to each horizon
from which production is obtained.
D. Production units may be formed or declared for all depths
or for separate horizons.
E. The Superintendent's Office will be provided a survey plat
for each drilling block contained in the production unit, as well as a
survey plat of the boundaries of the entire production unit. A statement
as to horizons governed by the production unit and a copy of the mineral
interest ownership setting out percentages of ownership for the production
unit will be filed with the Superintendent by the time of commencement of
production.
F. Well density within the production unit will not exceed one
well per drilling block per producing horizon, unless an increase in well
density is permitted by the Railroad Commission.
G. In all cases where a.production unit is formed composed of
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acreage in more than one drilling block, but the drilling permit only
covers one drilling block, all of the above requirements shall be met by
applying for an amended drilling permit and receiving such amended permit
before proceeding further with drilling or production operations.
SECTION 4. WELL LOCATIONS
All wells drilled in search of oil and gas within the City limits
of the City of Corpus Christi shall be drilled in accordance with the re-
quirements of this section.
4.1 Streets, Alleys and Easements. No well shall be drilled
within, or at any location nearer than 50 feet from, any street, alley or
utility easement.
4.2 Bayfront Restrictions. No well shall be drilled within
that portion of the City of Corpus Christi bounded on the west by either
Water Street or by Ocean Drive, bounded on the south by the Naval Air
Station, bounded on the east by Corpus Christi Bay, and bounded on the
north by the Corpus Christi Ship Channel.
4.3 Distance from Residences, Buildings or Structures. No well
shall be drilled at any location which is nearer than 400 feet from any
residence or other permanent structure intended for human occupancy, un-
less the applicant furnishes to the Superintendent written waivers executed
by all owners of such residences and such structures which are located
within 400 feet from the proposed location whereby the owners waive objec-
tion to the location and, unless the applicant furnishes to the Superin-
tendent evidence of reasonably appropriate written notification furnished
by applicant to the occupants of all such residences and such structures.
4.4 Location Near Schools, Hospitals, etc. No well shall be
drilled at any location which is on, or within 400 feet from any exterior
boundary line of, land used by any public or parochial school, college,
university, or hospital, or which is occupied by a church or a public build-
ing. The City Council is specifically authorized to grant a variance and
allow the drilling of a well which does not meet the requirements of this
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paragraph, if the applicant presents written evidence to the Council that
the owners or the governing body of such public or parochial school, college,
university, hospital, church or public building, have consented and agreed
in writing to the proposed well location.
4.5 Location Near Cemetaries and Parks. No well shall be drilled
at any location which is on, or less than 400 feet from the exterior boundary
line of lands utilized for cemetaries or public parks.
4.6 Deed Restriction Provisions. Nothing contained in this Or-
dinance shall be construed as authorizing the drilling of any well where
the operator has no legal authority to do so. It is expressly provided
that no well shall be drilled at any location where there are of public
record legally enforceable deed restrictions or covenants prohibiting the
drilling of such well.
4.7 Surface Rights. Neither this Ordinance nor any permit issued
hereunder shall be interpreted as granting any right or license to the per -
mittee to enter upon or use any land nor shall it limit or prevent the free
right of the owner of such land to contract for any payment of any kind for
damages or for rights or privileges with respect thereto.
4.8 Cluster of Producing Facilities. Only one area (hereinafter
called "Battery Site ") within each drilling block may be used for the pur-
pose of installing, maintaining and using facilities for collecting, sep-
arating, treating, and /or transporting production from oil or gas wells.
In those blocks where more than one battery site is in use for such proe;-:
duction facilities on the effective date,othe operator or operators may
continue to use such battery sites, but thereafter any additional facil-
sties shall be installed at one of the existing battery sites. After the
effective date, the operator of the first well drilled in each block where
no facilities exist will designate a battery site, not to exceed five (5)
acres, for said production facilities for that drilling block and will sub-
mit to the Superintendent a plat and written evidence of the surface owner's
consent granted for using such battery site, along with the operator's
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written agreement to permit other operators, having production in the
same drilling block on a fair and equitable basis, to use the same
facilities or erect separate facilities in the same designated battery
site. When a producible well is completed after the effective date, in
a drilling block where producing facilities already exist, then the oper-
ator of the nearest existing battery site in such drilling block shall
be required, on a fair and equitable basis, to permit the operator of the
new well to either use the existing facilities or erect his own on said
battery site. The Council may grant exceptions to this section when it
finds that the existing facilities and /or battery site is inadequate to
service other production or to include other facilities, and also that
the public health, safety and welfare is not endangered by creating a
further battery site in the drilling block.
4.9 Well Location Partly Within Drilling Block. A well may
have a surface location in one drilling block and be bottomed under another
drilling block, prouided that the surface location meets the requirements
of this Ordinance and the bottom hole location complies with the location
requirements of the Railroad Commission.
SECTION 5. DRILLING AND OPERATING PERMITS.
5.1 Permits Required. It shall be unlawful for any person,
acting either for himself or as an agent, employee, independent contractor
or servant of any other person, to commence to drill, to drill or to operate
any well or to assist in the drilling, completing or operating of any such
well for which a permit is required hereunder if a lawful permit therefor
has not been obtained.
5.2 Application for Drilling Permit in a Nonproducing Area. An
application for a drilling permit in a nonproducing area shall be filed in
duplicate (with all exhibits attached securely thereto) in the office of the
Superintendent for each well to be drilled. Such application shall be signed,
and the accuracy of the contents thereof and exhibits thereto shall be sworn
to before a notary public by the applicant or some representative of applicant
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having legal authority to enter into contracts binding upon the appli-
cant, and shall include (as exhibits constituting a part of the same,
where appropriate) the following:
5.2a The name and address of the applicant, and if the appli-
cant is a corporation, the name and address of the person upon whom pro-
cess may be served for such corporation, and if the applicant is a part-
nership, the names and addressed of the general partners.
5.2b The name, address and telephone number of a person, other
than applicant, designated as the local agent of the applicant to receive
for the applicant all process, citation, notices and demands hereunder.
If appropriate, more than one telephone number should be furnished.
5.2c As Exhibit "111, the numerical designation of the drilling
block and /or production units covered thereby, the metes and bounds de-
scription as reflected by the official survey thereof to be approved by
the Superintendent in accordance with the requirements of subsection 3.3
hereof, and a statement to the effect that to the best of the knowledge
and belief of the applicant his application for permit to drill complies
with all of the requirements of this Ordinance.
5.2d Applicant shall file, in addition to the required metes
and bounds description, a plat of the drilling block or blocks proposed
to be covered by the permit prepared and certified by a surveyor licensed
by the State of Texas which shall show the proposed surface location of
the well, together with distances from said well to the exterior boundary
lines of said drilling block. Said plat shall show distances from the
proposed surface well location to any residences or structures intended
for human occupancy which are located within four hundred feet (400')
from said surface 7well'.1ocation and shall show whether or not such well
location is in compliance with subsections 4.1, 4.2, 4.3, 4,4 and 4.5 of
this Ordinance.
5.2e Proposed total depth of the well.
5.2f Proposed casing and cementing program of the well.
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5.2g rfza� copies of Railroad Commission Form One (1) and Rail-
road Commission drilling permit, if issued, shall be attached as Exhibits
"2" and "3", respectively.
5.2h A copy of the Notice to the Federal Aviation Administration
and Airport Zoning Board of intention to drill said well shall be attached
as Exhibit "4 ", if such notice is required.
5.2i Insurance certificate dated not more than ten (10) days
prior to filing the application shall be attached as Exhibit 115 ". This
certificate shall indicate that the applicant has complied with at least
the minimum insurance requirements specified in this Ordinance at Section 7.
5.2j A copy of such bonds as required by this Ordinance shall
be attached as Exhibit "6 ". If no bond is required, applicant shall attach
as Exhibit "6" a statement to the effect that no bond is required with a
,i brief statement pertaining to the reason for the exception to the bond
requirement.
5.2k All applications for permits-to drill shall be: accompanied
by filing fee of 0300.00�iii•cash or by cashier's check made payable to the
City of Corpus Christi.
5.2L Each application shall be accompanied by a list of the
names and last known addresses of all record owners of interests in and
to oil, gas, and other minerals under the property included within the
drilling block on which the proposed well is to be located. Said list
shall be attached as Exhibit "7" and shall specify the fractional share
of operating rights within the drilling block owned by each of said
owners. For example, a fee owner of an entire block owns 100% of the
operating rights, unless an oil and gas lease has been executed by the
fee owner transferring the operating rights to a lessee, in which event
the lessee would be the owner of 100% of the operating rights. Likewise,
the owner of an undivided one -half interest in and to a fee simple min-
eral estate covering one- fourth of the drilling block and on which no oil,
gas and mineral lease has been executed, is the owner of one eighth of the
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operating rights in the drilling block. The applicant shall indicate
separately the percentage of total operating rights within the drilling
block owned or controlled by the applicant including operating rights
acquired by contract from other operating interest owners. Subsection
$.2L ' shall not apply to applications for additional drilling permits
for wells to be located in drilling blocks where such information has
already been furnished.
5.2m The permit application shall include a statement by the
applicant authorizing the City to expend such funds as may be necessary,
under the circumstances, to regain well control in accordance with the
terms and provisions of subsection ;6.15; of this Ordinance.
5.3 Recompletion Operations. No application is required for
recompletion operations in any well. A final report shall be filed with
the Superintendent within thirty (30) days after the recompletion of the
well and shall include a diagram of the well bore showing completion depth,
and pipe sizes, and a brief description of work performed.
5.4 Well Service Operation. No application or reports are re-
quired for well service operations.
5.5 Application for Drilling Permit in Producing Areas. Appli-
cations for drilling permits in areas exempted from unitization as provided
for in subsection 3.4 shall be filed in the same manner and shall have the
same information as those applications for drilling permits in nonexempt
areas except that the requirement of subsection 5.2L may be omitted.
5,6 Application Meeting Ordinance Requirements Shall Be Granted
by Superintendent.
Upon receipt of an application for a permit to drill and operate
a well, the Superintendent shall date and set up a file for this application
and examine same for compliance with this Ordinance. If the application is
in compliance with all requirements of the Ordinance, the Superintendent
shall publish a notice of the intention to grant such application unless
someone files a written protest in opposition to the granting within seven
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(7) days from date of publication. If the application is in compliance
with all provisions of this Ordinance, and no written protest in opposition
to the granting of the permit, based on one or more of the grounds set
forth in subsection 5.10 of this Ordinance is filed, then the Superintendent
will, in accordance with this Ordinance, within ten (10) days after date of
publication of notice, issue a permit. If a written protest in opposition
to the application is filed within seven (7) days from the date of publi-
cation of the notice and the Superintendent determines that the protest is
not well founded, he will, after three (3) days notice to the protestant,
issue the permit unless the protestant, within said three (3) days files
notice of appeal to the City Council. In the event the Superintendent has
found cause to deny the permit then the Superintendent shall, within ten
(10) days of the filing of said application, inform the applicant in writing
of reasons for such denial, and return the original copy of the application
and filing fee to the applicant. In the event of a written protest on
grounds which are found to be sufficient by the Superintendent, followed
by the denial of the permit, the Superintendent shall return the original
copy of the application and filing fee to the applicant and inform the
applicant in writing of his reasons for such denial. In either case the
applicant may then rectify the reason for denial of the permit and re-
submit the same to the Superintendent or appeal to the City Council through
the procedure described in subsection 5.7. In the event of appeal by the
protestant, the City Council shall set a date for the hearing and publish
a notice as provided in subsection 5.8 and inform the applicant of the
date of such hearing. Subsections 5.9 and 5.10 of this Ordinance shall be
applicable to the hearing.
5.7 Procedure Where Variances are Requested and Where Permit Is
Denied by Superintendent.
If the Superintendent does not grant a permit and the applicant
desires to appeal to the City Council, the applicant shall comply with the
following procedure:
The original copy of the application, accompanied by the filing
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fee and a copy of the Superintendent's written denial, shall be forwarded
to the City Secretary for hearing by the City Council. The City Secretary
shall set the hearing for the next regular meeting of the City Council after
seven (7) days from the receipt of the file and publish a notice of such
hearing at least five (5) days prior to the day of hearing; provided howe%rer,
where it is shown by the application, without contradiction by the Superin-
tendent, that all of the land within 400 feet of the proposed surface drilling
site is under lease to the applicant and no residence building or other per-
manent structure intended for human occupancy is within 400 feet of the pro-
posed drilling surface site, no notice shall be necessary under this or the
preceding subsection, and a hearing may be held by the City Council at any
time after filing of the application with the City Secretary.
5.8 Hearing Notice. Notice of the filing of an application and
hearing to be held by the City Council thereon, under this Section 5, and
the date of the hearing thereon shall be given by the City Secretary, at
the applicant's expense, by publication in one issue of a daily newspaper
published in the City.at least five days prior to the date of the hearing.
Such notices shall be in substantial compliance with the following form:
"Notice is hereby given that
as applicant, pursuant to the provisions of Section 5
of the Oil and Gas Drilling Ordinance of the City of
Corpus Christi, did on the—day of , 19
file with the City Secretary an application for a per-
mit to drill and /or operate a well upon Corpus Christi
Drilling Block No. a general description
of which is as follows:
Said application and a map showing the lands comprising
said drilling blocks and production unit and the exterior
boundaries thereof are on file in the office of the City
Secretary and are at said office subject to the examin-
ation of all persons during regular office hours. A
hearing upon such application will be held at the City
Hall by the Q? ty.Couuniliion the _day' of ,
19_, at o'clock _M., and at such continued
hearing or hearings, if any, as the City Council may in
its discretion, designate."
Proof of publication of such notice shall be made by the printer or publish-
er of the newspaper publishing the same by affidavit filed with the City
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<q
Secretary, and such affidavit shall be prima facie evidence of such pub-
lication,
5.9 Hearing Continuance, In,the event a majority of the mem-
bers of the City Council are not present at a hearing on an application
for a permit, or, at the discretion of the members of the City Council,
if a majority of the membersithereof are present at the hearing, the heart
ing;miytbe,:.cotitinue0 'to ao1d@sign&ted tilie:;and; daEe. -'..'
5.10 Refusal of Permit, Generally. The City Council shall have
the power to refuse any application for a permit to drill and operate any
well at any particular location within any drilling block where by reason
a
of such particular location and the character and value of the permanent
improvements already erected on or approkimately adjacent to the particular
location in question, and the use to which the land and surroundings are
adapted for school, college, university, hospital, park or civic purpose,
`nor for health or safety reasons or any of them, the drilling or operation
{ of such well on the particular location might be injurious or a disadvan-
tage to the City or to its inhabitants as a whole, or to a substantial
number of its inhabitants or visitors as a group; or the Council may grant
a permit, as it may deem necessary, on such reasonable conditions as to
protect all persons who, and property which, may be affected by the drill-
ing and production operations. s When the Council refuses to issue a permit
for the particular drilling location on the drilling block as applied for
by the applicant, it may, in lieu thereof, designate as the drilling loca-
tion a different drilling site on the drilling block subject to the applicant
obtaining all requisite leases, contracts and surface permission for the
designated substituted drilling site.
The City Secretary shall inform the applicant and the Superin-
tendent of the action of the City Council within three (3) days after the
Council has made a decision. If for any reason the permit as applied for
is not granted, or if the applicant refuses the permit because of any
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a
condition imposed therein, the application and filing fee, less service
charge of $100.00, shall be returned to the applicant.
5.11 Unused Permits. Where a permit filing fee has been paid
and a permit granted and such permit is returned for cancellation within
one (1) year without conducting any drilling operations, the filing fee shall
be placed to the credit of the applicant to be used in connection with any
future applications that the applicant may make. This credit is not trans-
ferable. None of the $300.00 filing fee shall be returned to the applicant
after a permit or conditional permit has been issued and accepted by appli-
cant. The applicant shall have thirty (30) days in which to reject the
permit or it will be deemed accepted.
5.12 Transfer of Permit. Any time within one (1) year from date
of issue, a permit validly in force may be transferred from permittee to
another operator upon written application to the Superintendent upon proper
showing that such new operator has acquired by assignment or contract the
operating rights of permittee, has assumed all of the obligations of permittee
under this Ordinance, and has complied with the insurance, bond, and all other
requirements of this Ordinance. Upon approval by the Superintendent of such
application, the Superintendent shall issue a substitute permit to such new
operator and cancel the original permit.
5.13 Effect of Drilling Permit. A drilling permit properly applied
for and issued in accordance with this Ordinance is permission to the per-
. i
mittee to drill such well in accordance with the application and conditions
of the permit and is also permission to produce the well and erect necessary
facilities or equipment to handle its production, all in accordance with the
terms and conditions of this Ordinance.
5.14 Tenure of Drilling Permit. The term'of a drilling permit
shall be for a period of one (1) year, unless within such year operations
are commenced, in which event the term shall continue as long thereafter as
production is obtained or drilling, reworking, recompletion or well service
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operations are conducted with no cessation of all such production and op-
erations for more than ninety (90) consecutive days and until the well is
plugged and abandoned in accordance with this Ordinance and a release of the
permit issued by the Superintendent.
5.15 Amending Drilling Permit. The holder of an unexpired and
unused drilling permit may, upon application and payment of a $50.00 ser-
vice charge, obtain an amended drilling permit from the Superintendent
for the purpose of changing the surface location from a regular or irreg-
ular location to another regular.location. Any application for a change
in surface drilling location to an irregular location will be processed
in accordance with subsections 5.7, 5.8, 5.9 and 5.10 of this Ordinance
and require payment of a service charge of $100.00.
Any holder of an unexpired and unused permit or the holder of
a permit in the process of drilling may, upon application and without
charge, obtain an amended permit from the Superintendent for the purpose
of changing bottom hole location, depth, or direction of hole from the
same surface location. When the permittee desires to form a production
unit as provided for in subsection 3.6 of this Ordinance, an amended per-
mit may be secured from the Superintendent, without any fee, upon appli-
cation and submittal of the requirements contained in said subsection 3.6.
5.16 Operation Permits For Prior Wells. The owner or operator
of every existing well shall, within six (6) months from the effective
date, make application to operate such well (without payment of any fee).
Such well shall be entitled to an operation permit, to be issued by the
Superintendent, upon an application showing:
A. The then condition of the well and the amount and size of
pipes and casing therein, the depth from which production is being ob-
tained and what is being produced.
B. A sketch or map showing the location in relation to a per-
t
manent marker, such as a street or road intersection, or with metes and
bounds reference to a filed plat so as to show the exact location of the
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surface installation at the site of such well, including drilling block
number.
C. A short description of the surface installations, including
tanks, pumping equipment, compressor, etc.
D. A specification of existence of any buildings, structures
or public roads to the well location within 330 feet of the location.
E. An affidavit shall be attached verifying the truth of the
statements contained in the application as well as showing the name of the
operator of said well and the principal owner of the working interest, to-
gether with their respective addresses.
F. A certificate of insurance in accordance with the require-
ments of subsection 7.1 of this Ordinance.
G. A copy of the Railroad Commission permit.
5.17 Future Annexation. Every existing well within any territory
hereafter annexed shall, within six (6) months after date of annexation, be
the subject of, an application for registration, as in case of wells in .
existence at the time of the adoption of this Ordinance. The term "existing
well" as used in this subsection shall have the meaning specified in sub-
section 2.11 except that the effective date of annexation rather than the
effective date of this Ordinance shall apply.
5.18 Seismic Surveys. No geophysical work employing underground
explosives will be permitted anywhere at any time within the City limits.
Other geophysical systems employing the "thumper ", "vibroseis ", and other
techniques not employing explosives, will be permitted upon proper appli-
cation and the payment of a $50.00 application fee. A proper application
will include the following:
A. Letter of application requesting a geophysical permit. The
s.,xa �, - letter shall set_out .when it is intended, to begin the work and_ also the,
anticipated date of completion. A statement shall also be made relieving
the City of any liability for damages which may result from LfhawToporzition
performed by the applicant.
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• 1
B. The letter of application shall be accompanied by a copy
of a valid and subsisting public liability insurance policy.
C. A plat outlining the areas proposed to be covered by the
survey.
When the above is properly submitted the Superintendent may
issue a permit to the applicant to conduct such seismic or geophysical
work, if in his opinion, this work will not create a public nuisance nor
be contrary to the public safety.
D. If the applicant is acting as contractor for another party,
then a letter of authorization to perform such work must accompany the
application.
5.19 Annual Inspection Fee. There is hereby levied an annual
per well inspection fee of $25.00 which shall be due and payable during
the month of January of each calendar year, and a failure to pay such
fee shall be cause for revocation of any permit issued under this Ordinance.
The Superintendent will prepare an annual well inspection report which is to
be made available to the operators prior to January 1 of each year. In the
event an Intent to Plug and Abandon a well has been filed with the
Superintendent prior to January 31, but which abandonment may not have been
completed by January 31, payment of said $25.00 fee for that well shall be
excused provided such well is finally plugged and abandoned in accordance
with the Ordinance prior to March 1 of that same year. A new well on
which drilling operations are in progress on the 31st day of January
shall be exempt from the $25.00 fee for the remainder of that calendar
year.
SECTION 6. RULES FOR DRILLING AND PRODUCING OPERATIONS
6.1 Compliance with Laws, Rules and Regulations. Any violation
of any valid law or of any valid rule, regulation or requirement of any
state or federal regulatory body having jurisdiction with reference to
drilling, completing, equipping, operating, producing, maintaining, or
_22_
abandoning oil or gas wells or related appurtenances, equipment or facili-
ties, or with reference to firewalls, fire protection, blow out protection
or safety of persons or property shall be a violation of this Ordinance.
6.2 Pits. The use of earthen pits for reserve mud or waste
material such as drilling mud, contaminated mud, drill stem test returns
and the like shall not be permitted. However, earthen pits may be used
for storage of fresh water and for drill cuttings only. An exception to
any requirement of this section may be granted by the City Council upon
such conditions as the Council may provide.
6.3 Derricks and Rigs. No operator shall use or operate in
connection with the drilling or reworking of any well, any wooden derrick
or steam powered rig, or permit any drilling rig or derrick to remain on
the premises or drilling site for a period longer than sixty (60) days
after completion or abandonment of any well. All engines shall be equipped
with effective mufflers.
6.4 Drilling Fluid. The bore hole of any well while being
drilled or reworked shall at all times contain drilling fluid of a weight
and viscosity which a reasonably prudent operator would use to keep the
well under control.
6.5 Blow Out Preventers. Two dual controlled, fluid operated
blow out preventers with working pressure rating equal to the maximum an-
ticipated wellhead pressures shall be used for all drilling or completion
operations involving the use of drill pIpe or tubing after the surface casing
has been set. For wells drilled to depths below 9,000 feet, a Hydril type
blow out preventer shall be used in addition to the two dual controlled
blow out preventers above specified. The mechanical operation of the blow
out preventers shall be checked a minimum of every twenty -four (24) hours
and pressure tested prior to installation on each casing string. A choke
manifold having the same working pressure rating as lthe, preventers will be
installed below the blow out preventer stack. An exception to any require-
-23-
went of this section may be granted by the Superintendent.
6.6 Surface Casing. After the effective date, all operators
commencing drilling operations on a new well shall be required to set and
cement a sufficient amount of surface casing to properly protect all fresh
water sands in accordance with the requirements of any governmental agency
having jurisdiction. The length of surface casing shall in no case be less
than 0.15 of the length of the next string of pipe proposed to be set. The
surface casing shall be of new casing and shall be cemented by the pump and
plug method. A volume of cement shall be used which, according to accepted
engineering procedures, is calculated to fill the annular space between the
w
surface casing and well bore to the surface of the ground and the cement
shall be allowed to stand for a minimum period of twelve (12) hours before
the plug is drilled. An exception may be granted by the Superintendent.
6.7 Production and Protection Casing. The producing or pro-
tection strings of casing, installed after the effective date, shall be
of new pipe meeting API specifications. Cementing shall be by the pump
and plug method and a volume of cement which is, according to accepted
engineering calculations, sufficient to fill the annular space between
the casing and the well bore to a point at least six hundred (600) feet
above the shoe or the highest producing zone, whichever is the shallower
depth. Cement shall be allowed to stand for a minimum period of twelve
(12) hours before drilling the plug. An exception may be granted by the
Superintendent.
6.8 Drill Stem Tests. No operator shall conduct or allow to
be conducted any swabbing operations or the taking or completion of any
drill stem test except during daylight hours. Drill stem tests may be
conducted only if the well effluent produced during the test is produced
through an adequate oil and gas separator to storage vessels and the effluent
remaining in the drill pipe at the time the tool is closed is flushed to the
surface by circulating drilling fluid down the annulus and up the drill pipe.
-24-
An exception to the requirements of this section may be granted by the
Superintendent.
6.9 Formation Pressures. No well shall be completed or operr-
ated in a zone which is reasonably anticipated to produce shut in pressures
in excess of the working pressure rating of the standard API wellhead
equipment on the well.
6.10 Wellheads. All wells drilled or completed after the
effective date will be equipped with casingheads, tubing heads, and
wellhead connections which conform to API standards. The casingheads
used on such wells shall have working pressure ratings of not less than
3,000 lbs. per square inch (3,000 psi). Tubingheads and wellhead connec-
tions used on such wells shall have working pressure ratings in excess
of the well's shut in surface pressure. All such wells having a surface
shut in pressure of 3,000 lbs per square inch (3,000 psi) or less shall
be equipped with at least one master valve and one wing valve. All wells
having surface shut in pressures in excess of 3,000 lbs per square inch
(3,000 psi) shall be equipped with at least two master valves and one
wing valve, and no such well shall have threaded connections between the
surface safety valve and the Christmas tree.
6.11 Multiple Completions. Multiple completions and tubingless
completions are permitted.
6.12 Surface Safety Valves. A high- Io*osurface safety valve
shall be installed on all wells with a surface shut in pressure in excess
of 3,000 lbs. per square inch (3,000 psi).
6.13 Subsurface Safety Valves, All flowing wells having shut in
wellhead pressures of 2,500 lbs. per square inch (1,500 psi) or above or
which are located within a bay or on land within one hundred and fifty feet
(150 ft.) of a bay shoreline (said shoreline being defined as 0.5 feet above
United States Coast and Geodetic Datum) and with a surface elevation of less
than ten (10) feet above this Datum, or which are located within fifty feet
(50 ft.) of a public street, shall be equipped with a subsurface safety
-25-
F'J
valve (storm choke) installed in the tubing or production string. This
valve shall be pulled and inspected between April 1 and August 1 of each
year and more often if desired by the operator and a report of the inspec-
tion filed with the Superintendent. An exception to this provision may be
granted by the Superintendent.
6.14 Final Report. Within thirty (30) days after completion of
any well, permittee shall file in the office of the Superintendent a final y
report including the casing program actually utilized in the well. The
final report shall specify any changes in well location, depth, and any
other variation from the terms of the application. The final report shall
specify the perforated interval and include information pertaining to other
perforations, if any.
6.15 Well.Control. In the event of the loss of control of any
well the operator shall immediately take all reasonable steps to regain
control of such well, regardless of any other provisions of this Ordinance,
and shall notify the Superintendent as soon as practicable after receipt
of notice by operator of the occurrence of such loss of well control en-
dangering persons or property. If and when the Superintendent certifies
in writing to the City Secretary that, in his opinion, (a) danger to per-
sons or property exists because of such loss of well control, briefly
describing the same, and (b) the operator is not taking, or is unable to
take, all reasonably necessary steps to regain control of such well, the
Superintendent may employ any well control expert or experts or other con-
tractors or suppliers of special services, or may incur any other expense
for labor or material which the Superintendent deems necessary to regain
control of such well. The City shall have a valid lien against the in-
terest in tha well of all working interest owners who have voluntarily
joined in the drilling of such well, to secure payment of any expenditure
made by the City pursuant to any such action of the Superintendent in re-
gaining control of said well. However, no such lien shall attach to thee
-26-
interest in the well of those persons who have been presumed to have
elected to participate as carried interest owners under Section 8 of this
Ordinance.
6.16 Relief Wells. Drilling of a relief well may be commenced
without first securing a permit if such action is deemed necessary in the
good faith opinion of the operator. Lessee shall make all reasonable
efforts to notify the Superintendent by telephone as soon as feasible,
but failure to make such notification shall not be deemed a violation of
this Ordinance. Within twenty-four (24) hours after the commencement of
operations for the drilling of such a relief well, the lessee drilling the
same shall notify the Superintendent that such operations have been commenced,
stating fully the reasons therefor, and such lessee shall within five (5)
days after such commencement of operations make application to the
Superintendent for a special permit to drill said well as a "relief well ".
No filing fee is required for a "relief well" permit, but the
lessee drilling such relief well shall furnish the Superintendent any in-
formation with respect to such relief well as may be requested from time
to time by the Council or the Superintendent. No such well drilled as a
relief well under the provisions of this subsection 6.16 shall be completed
as a producing well unless a permit therefor shall have been issued in the
same manner as is required under Section 5 of this Ordinance, for the
drilling of any other well. A "relief well" permit will be for a six (6)
months period only, and any relief well not completed as a producing
well shall be plugged and abandoned within six (6) months after commence -
meet of drilling operations, unless an extension is granted by the
Superintendent.
6.17 Pipelines, Before any excavation or construction work is
commenced on any pipeline to move oil, gas, water or other product to or
from any well site, on, over, under, along or across any City street, side-
walk, alley or other City property, a franchise shall first be obtained
from the City Council as required by the City Charter. All pipelines shall
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t
be laid only in accordance with the provisions of such franchise, this
Ordinance, the City Charter and other ordinances of the City. All per-
manent pipelines constructed after the effective date, and replacement
of any part of any pipeline existing at the date of this Ordinance, shall
be composed of all new pipe, meeting A.S.A. B31.8 specifications. Any
operator constructing a pipeline shall furnish the Superintendent a
plat showing the proposed and as -built location and size of such pipe-
line. No operator shall interfere with or damage any existing storm
sewer, drainage facility, water line, sewer line,or,.gas line, or facility
of a public utility located on, under or across the course of any such
pipeline. Temporary lines may be laid under revocable easements.
6.18 Storage Facilities. Steel storage tanks shall be used
for the storage of liquid hydrocarbons and shall be constructed, installed
and maintained in gogood and workmanlike manner. All such steel tanks
installed after the effective date, shall meet the minimum quality and
design standards of API standard 12B bolted steel tanks or API standard
12D welded steel tanks including recommended pressure and vacuum relief
valves. All such tanks shall be equipped with a vent line and at the
point were gas is vented to the atmosphere from said vent line a flame
arrester shall be installed. Each tank or tank battery, as the case may
be, shall be surrounded by an earthen fire iwa'll located at such a distance
from the tanks and of sufficient height to hold and retain at least one
and one -half (1 -1/2) times the maximum capacity of such storage facilities.
An operator may use, construct and operate steel conventional separators
and such other appurtenances as are reasonably necessary for treating oil,
condensate, or gas at each tank battery location. Such facilities shall
be constructed and maintained so as to meet or exceed API standards. Each
oil and gas separator shall be equipped with both a regulation pressure
relief safety valve and a bursting head.
6.19 Fired Vessels. No fired vessel or open flame shall be
-28-
located nearer than one hundred and fifty (150) feet from any well or
storage tank.
6.20 Fences. All wells and production facilities shall be
adequately protected by a fence constructed so as to prevent easy entry
when required by the Superintendent; however, any wellhead, tank battery,
pumping unit or equipment appurtenant thereto located on any lease, tract
or farm, which is adequately fenced in its entirety will require no addi-
tional fencing. Safety precautions normally taken by reasonably prudent
operators shall be observed. Fences to prevent easy entry shall be
approved by the Superintendent.
6.21 Pumping Unit Prime Movers. Only electric prime movers
shall be permitted for the purpose of pumping wells unless a waiver of
this provision is obtained from the Superintendent.
6.22 Vented Gas. No operator shall allow gas to escape or be
vented into the air except for bleed gas normally vented from standard
gas operated controls and normal stock tank vapors, All gas burned shall
be burned in a manner which does not create or constitute a fire hazard and
the location of the torch, pipe or other burning device, the construction
thereof, the maintenance thereof, and the operation thereof shall at all
times be in full compliance with such regulations as may be from time to
time issued by the Fire Department of the City of Corpus Christi.
6.23 Salt Water and Waste Water Disposal. All salt water pro-
duced from any oil or gas well shall be disposed of underground unless a
permit to dispose of the water by some other method is approved by the
Railroad Commission and where required, a revocable easement be obtained
as provided in the City Ordinance adopted April 24, 1968, or such other
regulatory ordinance as may be adopted pertaining to same. No person shall
permit any crude oil, gas or other flammable petroleum product to spill
over, overflow, leak, drain out, escap6 or accumulate in any sewer or about
the premises, or on any surface, or in any open surface ditch or any other
-29-
O
exposed surface conduit, or handle any hydrocarbon in any manner or amount
which creates a potential fire hazard, or permit any condition which may
pollute any surface or subsurface water or damage any publicly owned land.
6.24. Corrosion Protection. After the effective date, wells
must be electrically isolated from all metallic piping and gathering systems
unless the well and such piping are cathodically protected as a system.
Electrical isolation of such wells shall be done by the use of insulating
sleeves and washers in flanges or insulating unions. The effectiveness
of such insulating devices must be tested at least every six (6) months
and the results of such tests reported to the Superintendent.
6.25 Production Equipment. The operator shall maintain all
production equipment in good condition.
6.26 Premises To Be Xept Clean. All surface areas utilized by
an operator, for production facilities shall be kept clear of high grass,
weeds and combustible trash or other rubbish or debris that would, if allowed
to accumulate, result in a fire hazard.
6.27 Secondary Recovery and Pressure Maintenance. Equipment in-
stalled for the purpose of performing secondary recovery, pressure main-
tenance or other improved recovery operations or for automatic lease opera-
tions shall comply with all safety regulations of all ordinances of the City
of Corpus Christi and the rules of the Railroad Commission.
6.28 Signs. Printed signs with at least two (2) inch letters
reading "DANGER, NO SMOKING OR OPEN FLAMES ALLOWED ", or similar words,
shall be posted in conspicuous places on each well, storage tank or battery
of tanks. The signs shall include the drilling block number and emergency
notification telephone number of the Corpus Christi Fire Department. Well
and lease designations required by the Railroad Commission of Texas or any
other governmental authority having jurisdiction shall also be displayed,
6.29 Blocking of Streets and Alleys. No street or alley shall
be blocked or obstructed by any drilling or producing operations unless
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t
r!
.bye. Y yy�r.
.fr
prior consent is obtained by the operator in the form of a resolution 64opted
h9lPthe :6ity teadnSib; :exaepb -whoa necessaxy poopf6Cedi -Iifa or.'optoger£y in
connection with emergency operations being conducted under or pursuant to
subsections 6.15 and 6.16.
6.30 Hurricane Precautions. When movement of a storm or
hurricane indicates winds of destructive force are possible in the area
covered hereby within twenty -four (24) hours, all operators shall begin
to shut down all drilling and workover operations and take other precautions
at that time to insure a state of readiness on short notice. Drill pipe
shall be either laid down or left in the wellbbaecand drilling and work-
over masts shall be laid down.
At such time as it is indicated that movement of the storm or
hurricane is such that winds of hurricane force are imminent, production
shall be shut down unless minimum requirements for the production facility
include devices to automatically prevent flow to or from the production
facility in the event the facility is damaged or destroyed.
6.31 Wells To Be Abandoned. All wells within the City limits
of Corpus Christi which are not producing oil or gas on a regular basis
will, with the exceptions noted below, be plugged and abandoned.
Exceptions:
A. Wells in use as water supply wells.
B. Wells in use as salt water or waste disposal wells which are
operating under a valid permit from the governmental agency
having ffuthority.
C. Wells used as injection or observation wells in secondary
recovery, pressure maintenance or other improved recovery
operations where such operations are conducted under a valid
permit from the Railroad Commission.
D. Wells capable of producing oil or gas on a regular basis which
are shut in due to lack of market or because of transfer of
-31-
allowable permitted by the Railroad Commission.
E. Any well on which drilling, reworking, recompletion, or well
servicing operations are in progress and continued with no
cessation of more than ninety (90) consecutive days.
F. Such other wells where, within ninety (90) days of the
effective date, or within ninety (90) days of the well's
ceasing to produce oil or gas on a regular basis, the owner
thereof files with the Superintendent an application for
exception which includes the following:
1. Name,of the owner of the well and the operator.
2. Surface location of the well by metes and bounds related
to drilling block number.
3. Wellbore diagram showing casing set, completion interval and
down -hole equipment in the well if such information is avail-
able.
4. A surety bond in the amount of $2,500.00 with good and
sufficient corporate surety payable to the City of Corpus
Christi, providing that the principal will plug said well in
accordance with the provisions of this Ordinance. In lieu of
said bond, cash in the amount of $2,500.00 may be deposited
with the City on the same conditions. A bond conditioned as
provided in subsection 7.2 of this Ordinance shall also be
filed unless such bond so conditioned is already on file and
in effect. The bond shall be released when the well is plugged
and abandoned, or when the Superintendent has been satisfied
that the well is again producing oil or gas on a regular
basis, or when it meets one of the conditions of exemption
listed in paragraphs C, D and E of this subsection 6.31.
5. A certificate of existence of public liability insurance in
the amounts set out in subsection 7.1.
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6. Date of Railroad Commission permit and copy of latest order
of Railroad Commission pertaining to such well,
6.32 Abandonment Procedures. Whenever any well is abandoned,
it shall be the obligation of the operator to plug such well in accordance
with the laws of the State of Texas, the rules of the Railroad Commission
of Texas, the procedure outlined in this Ordinance, and /or any other agency
having jurisdiction in connection with the abandonment or plugging of such
well. The operator shall submit to the Superintendent's Office twenty -four
(24) hours in advance of the plugging operation a Notice of Intent to Plug
and Abandon which will include the abandonment program and request for
release of permit. Whenever a drilling or reworking operation has just
been completed on a well and the operator desires to plug and abandon such
well, the twenty -four (24) hour notice shall be reduced to no less than a
two (2) hour notice.
A. Where enough of the producing or protective casing has been
removed from the well to expose the shoe of the surface casing thin a
one hundred foot (100') cement plug shall be placed opposite the shoe of
the surface casing to extend at least fifty feet (50') downward and •a
similar fifty feet (50') upwards from the shoe of the surface casing.
Sufficient time shall be allowed for this cement to harden enough so
that it will sustain the weight of drill pipe or+tubing to this depth.* The
operator shall feel for the top of the plug to determine that the top.is at
least fifty feet (50') above the shoe of the surface casing and is of '
sufficient hardness to hold the weight of the drill pipe or tubing to this
depth. In the event the top of the plug is not fifty feet (50') upwards
from the shoe, then a second cement application will be required and
tested as above. After the plug at the shoe has been successfully completed
then,a minimum fifty foot (50') cement plug shall be set at the surface,
after which the casing shall be cut off a minimum of five feet (51) below
the surface of the ground and a one -half inch (1/2 ") steel plate welded
over the top. A two inch (2 ") collar shall be welded to the top plate and
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a piece of two inch (2 ") galvanized pipe shall be screwed into this collar
so as to extend upwards three feet (3') above the surface. The location
shall then be backfilled and leveled.
B. Where the protective or producing string of casing to be
left in the well extends upwards from the shoe of the surface casing so
as to prevent the above described method of abandonment, then the following
procedure will be used. A packer or cast iron cement retainer shall be set
in the surface casing fifty feet (50') above the top of any other casing
within the surface casing and sufficient cement shall then be squeezed
below the packer or retainer to theoretically extend to one hundred feet
(100') below the shoe of the surface casing and fill that portion up to the
packer or retainer with the cement. The packer or retainer will be left in
the well. A surface plug as described above will then be set and abandonment
completed in the same manner as described in paragraph A of this subsection
6.32.
C. Where well conditions prevent plugging of the well in accor-
dance with above paragraphs A and B of this subsection 6.32, the operator
shall plug and abandon such well using any alternate method which may be
proposed by the operator and approved by the Superintendent.
D. The Superintendent's Office shall witness all plugging and
abandonments and certify in writing that the abandonment was or was not in
accordance with the above procedure. No permit will be released without
certification that the plugging and abandonment was successfully accom-
plished in accordance with the above procedure. A "Plugging Certificate"
will be issued by the Superintendent and a copy forwarded to operator or
owner of the plugged well.
E. When a well has been plugged and abandoned in accordance with
the above procedures and permittee is entitled to a release of permit, the
s Superintendent's Office will affix some prpper identification marking to the
two inch (2 ") riser (as required in paragraph A of this subsection 6.32),
and make an office record thereof so that ready reference to the office
files will reflect the exact location of the well, date of abandonment,
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and condition of well at time of abandonment. It shall be unlawful to
remove such marking or riser unless a permit to remove same is approved
by the Superintendent's Office.
6.33 Production Equipment Installed Prior to Enactment of This
Ordinance.
The provisions of this Section 6 shall not be construed to re-
quire the moving from its present location to another location of any
production facility or equipment in use at the time of enactment of this
Ordinance where the production facility or equipment was lawfully located
at the time of the enactment of this Ordinance, but such production facility
or equipment shall in all other respects be required to conform to the
provision of this Ordinance.
6.34 Annual Report. Ninety (90) days from the effective date,
and on or before the 31st day of January of each year, beginning with
January 31,1969, every operator of a well located within the City limits
as of the preceding January 1st and which has not been plugged and aban-
doned, shall file with the Superintendent a report listing each and every
such well by name and number and the drilling block number in which the
well is located, and applicable paragraphs of subsection 6.31, under which
each exception from plugging and abandonment is claimed.
SECTION 7. INSURANCE AND BONDS
7.1 Insurance Requirements. All operators shall maintain or
cause to be maintained public liability insurance and insurance coverage
oil their employees, agents and contractors (or require such insurance to
be maintained), in addition to required Workman's Compensation insurance,
in at least the following amounts:
Comprehensive General Liability Insurance: Public Liability
(Bodily Injury) Insurance with limits of not less than $100,000.00,
for each person, and $300,000.00 for each accident, and
$300,000.00 in the aggregate; Public Liability (Property Damage)
Insurance with limits of not less than $100,000.00 for each
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accident and $200,000.00 for any number of accidents.
7.2 Bond Requirements. Each applicant shall file a bond with
the Superintendent, executed by the applicant as principal and by a good
and sufficient corporate surety company. Said bond shall provide that the
principal will remedy any and all damages to the streets, curbs, gutters,
water lines, fire hydrants and other public property, occasioned in any
manner by the principal, his agents, emplpyees, servants and contractors,
r
and that applicant will reimburse the City for any expenditures made by
the City under the authority granted in subsection 6.15 of this Ordinance.
Such bonds shall :inure: to the benefit of the City of Corpus Christi; shall
be in a form acceptable to the City Attorney; and shall be in the amount of
$10,000.00. An applicant shall not be required to post additional bond if
he has approved bonds on file with the Superintendent, as required by this
subsection 7.2, totaling $50,000.00. Each bond shall be for a term of
five (5) years and shall be kept in effect by renewal on or before any
expiration date unless the applicant is sooner released by the Superintendent.
7.3 Self Insurance. The City Council mayawaive the requirements
for any bond or policies of insurance, which are required under this Ordinance,
as to any applicant who is financially responsible and capable of meeting
obligations for amounts in excess of $300,000.00 upon applicant filing with
the Superintendent, in lieu of said surety bond and insurance requirements,
a letter of acceptance and indemnity, approved by the City Attorney, binding
and obligating said applicant to abide by the conditions for which surety
bond and insurance policies are required as prescribed above and agreeing
to indemnify and hold the City harmless from liability growing out of or
attributable to the granting of permits hereunder to such applicant.
7.4 Release of Bonds and Permits. The Superintendent may release
bonds and permits, as to the City, under the following conditions:
A. When the permittee ceases all operations covered by this
Ordinance, all wells for which the permittee holds permits have been plugged
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in accordance with the terms hereof, including the removal of all equip-
ment and machinery, and files a request for release with the Superintendent,
the Superintendent shall furnish a release as to the City, of all of that
permittee's bonds pertaining to the particular well.
B. If the permittee assigns all of his interest in the drilling
block or production unit covered by a bond or bonds, such assignor shall
be released from such bond as to that drilling block or production unit,
except as to any liability then existing, after the assignee has fully
complied with the bond and insurance requirements of this Ordinance, and
the issuance of a substitute permit under subsection 5.12 shall constitute
a release of the original permit.
C. Any permittee who has plugged and abandoned a well in accor-
dance with the requirements of this Ordinance and complied with all other
requirements of this Ordinance may, upon request to the Superintendent,
be furnished a release of the permit pertaining to such well.
7.5 Bond Surety. By the term "good and sufficient corporate
surety company" is meant a surety company licensed to do business in the
State of Texas and whose name appears on the current list of accepted
surety on federal bonds published by the U. S. Treasury Department. When-
ever in this Ordinance a bond is mentioned, such bond, to be acceptable,
must have a good and sufficient corporate surety company as surety.
SECTION 8. UNITIZATION
In order to facilitate the orderly development of oil and gas
production in the City of Corpus Christi and to avoid confiscation of
property, owners of oil and gas interests required to be unitized by
Section 3 hereof, shall be given the opportunity to participate in the
production of pil and gas from the drilling block in which their property
is located subject to the rules provided in this Section and Section 3 of
this Ordinance.
8.1 Procedure for Unitization. The procedure outlined herein
for the unitization of oil and gas interests is not intended to be an
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t
exclusive method for unitizing such interests. Voluntary unitization is
authorized and encouraged as a substitute for the procedures outlined herein.
A voluntary unitization agreement between the various owners will satisfy
the unitization requirements contained in this Ordinance insofar as they
relate to those owners signing said unitization agreement. If voluntary
agreements cannot be reached with all of the owners of oil and gas interests
within the drilling block to be unitized, the procedure for unitizing all
interests in such drilling block or blocks not voluntarily unitized or
owned by applicant shall be as follows:
8.1a Applicant shall file application to drill In accordance
with the terms and provisions of Section 5 hereof, including the names
and addresses of all owners of oil and gas interests within the drilling
block or blocks covered by the application.
8.1b Owners of oil and gas interests shall be entitled to the
following options:
1. Mineral fee owner: A mineral fee owner of an oil and gas
interest not covered by an existing oil and gas leaseeshall
be entitled to participate as a royalty owner on the basis
of one - eighth royalty interest in the property covered by
his mineral fee. In addition, said mineral fee owner shall
be entitled to elect between the options available to the
lessee (see paragraph 2 of this subsection 8.1b); however,
if said mineral fee owner fails to elect between the options
available to the lessee within thirty (30) days from the date
of posting of the notice required in subsection 8.2, he shall
be conclusively presumed to have elected to participate as
a carried interest owner as provided in .opt.i6n'1,; pa�ragiaph
2-of this subsection 8.1b. If any such mineral owner owns
an interest in the oil and gas on, in and under said land
less than the entire fee simple oil and gas mineral estate,
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then the royalty participation of such mineral owner, and such
owner's share of participation as an operating owner or as a
carried interest owner under either option No. 1 or 2 below, shall
be reduced in the proportion that his interest bears to the whole
and undivided fee and in accordance with the nature of the estate
of which he is seized.
2. Lessee: Lessee shall be entitled to elect between the following
options:
Option No. l: Lessee may elect within thirty (30) days from the
date of posting said notice to participate in the drilling and
production of the well as an active operating interest owner in
which event he shall pay his proportionate share of all drilling
and operating costs and shall participate in production in proportion
to his ownership in the production unit. If such owner elects to
participate as an operating owner he shall either post bond, written
by an approved bonding company as provided in subsection 7.5, or
deposit cash with the applicant guaranteeing payment to applicant
of such operating interest owner's proportionate share on a surface
acreage basis of the following amounts: (a) the estimated cost of
drilling and completing the well; and (b) the estimated monthly
operating expenses. If the cost of drilling and completing the well
exceeds the estimated cost, such owner shall forthwith on demand pay
his proportionate share of the excess to the applicant, or if the
actual costs are less than the estimate, such owner's proportionate
share of the difference shall be refunded by applicant on demand.
Such operating interest owner shall advance to applicant�at monthly
or other mutually acceptable intervals such owner's share of estimated
expenses of operating the production unit or, at the election of
applicant, such owner's share of the operating expenses may be
deducted by applicant from revenues from production which otherwise
would be payable to such owner as such expenses accrue.
Option No. 2: Lessee may elect to become the owner of a'carried
interest. If lessee elects to be a carried interest owner he shall
not be entitled to receive any revenue from his interest in the
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�a
drilling block until such time as the participating owners have
received from the proceeds of production attributable to said
carried interest owner's leasehold interest an amount equal to
his proportionate share of current operating expenses, the cost
of purchasing and installing all pipelines, tank batteries and
other equipment installed by the participating owners to
facilitate production of oil and gas from said drilling block,
and an amount equal to twice said carried interest owner's
proportionate share of the cost of drilling and completing
each well drilled within said drilling block. The interest of
such a carried interest owner shall be subject to its propor-
tionate share of all operating costs incurred by the operating
owners and properly allocable to the drilling block in accor-
dance with accepted accounting practices. Any remaining income
attributable to said carried interest shall be payable to the
owner thereof monthly. If a lessee fails to elect to partici-
pate under one of the two options shown above within thirty
(30) days after the date of posting notice to such interest
owner of operator's intent to unitize said unit, then and in
that event such lessee shall be presumed to have elected to par-
ticipate as a carried interest owner under Option 2 above.
8.2 Notice to Owners. Notice to the owners (whose addresses are
known or are ascertainable by use of ordinary diligence) of the oil and
gas interests within the affected drilling block or blocks which are not
under lease to the applicant and which are not covered by voluntary unit-
ization agreements shall be given as follows:
1. The applicant shall deliver or send by certified mail to all
such owners, at their last known address, a written notice
which shall include the following:
A. A legal description of the proposed drilling block or
proposed production unit.
B. The drilling block number in which the proposed well is
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to be located.
C. Type of interest held by the owner being notified (royalty
under existing lease, mineral fee, lessee, overriding
royalty etc.).
D. A statement of the options available to the owner being
notified, if any, as set out in this Ordinance at sub-
section 8.1b, if applicable.
E. Notification that if the owner fails to notify the applicant
P
in writing within thirty (30) days from the date of posting
of said notice to each owner of the selection of one of the
available options the owner will be conclusively presumed
to have elected to participate as a carried interest owner
as set out in subsection 8.1b.
2. In addition to the individual notification provided for above,
the applicant will cause to be published in one issue of a
daily newspaper published in the City a notice in substantial
compliance with the following forma
"Notice is hereby given that of
, (name and address) as applicant,
pursuant to the provisions of the Oil and Gas Drilling
Ordinance of the City of Corpus Christi, will, on or about
the day of 19 , file with the City
Petroleum Superintendent an application for a permit to
drill and /or operate a well upon Corpus Christi Drilling
Block No. , a general description of which is as
A map showing the lands comprising daid drilling block and
the exterior boundaries thereof is on file in the office of
the Superintendent and is at said office subject to exam-
ination of all persons during regular office hours. All
interests within said drilling block will be unitized
pursuant to Section 3 of the Oil and Gas Drilling Ordinance.
Owners of operating rights in land to be unitized have the
option of (1) participating in the drilling and production
of the well as active operating interest owners; or (2) be-
coming a carried 'interest owner. Owners who do not notify
the applicant in writing of their election of one of the
options available within thirty (30) days of the date of
this publication will be conclusively presumed to have
elected to participate as a carried interest owner as
provided in subsection 8.1b of Ordinance No.
of the City.•of .Cdrpps..Christi."
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rX..
8.3 Allocation of Production. Production from such unitized
drilling blocks or production units shall be allocated to tracts which are
unitized under the provisions of this Section 8 in the proportions that the
surface acreage of each such individual tract has to the total surface acreage
in the drilling block or production unit. Owners of interests under such
tracts shall share in the production allocated to the individual tracts on
the basis of their interest therein. Production from the drilling block
or production unit in which said owner participates shall be treated as
production from all of the tracts within said drilling block or production
unit.
8.4 Contracts Between Permittee and Other Owners. The permittee
and owners of other mineral interests in any drilling block or production
unit shall be able to alter the obligations as set out in this section by
an agreement made by them in writing, provided such agreement is not in
conflict with other provisions of this Ordinance.
SECTION 9. ENFORCEMENT
9.1 Administrative Enforcement and Supervision. Administrative
enforcement of the terms of this Ordinance shall be by the Division of
Petroleum Inspection of the Department of Public Works of the City. It
shall be the duty of the Superintendent to enforce the provisions of this
Ordinance and to that end he is hereby vested with police authority.
9.2 Enforcement. In addition to any other penalty provided by
this section, the Council may direct the City Attorney to initiate an action
in any court having competent jurisdiction to enjoin any violations of the
provisions of this Ordinance or for an injunction to compel compliance with
any provision of this Ordinance.
9.3 Public Excluded. It shall be unlawful for any person, un-
less authorized by the Operator, to enter a fenced area around any well or
production facility. It shall be unlawful for any person, unless authorized
by the Operator to touch any well or production equipment. Notwithstanding
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Y
any other provision hereof, the Superintendent shall have the right to
enter the area of any drill site at any time. In the event any fence
surrounding any well or production facility shall be kept locked, upon
request of the Superintendent, the key shall be furnished to him for use
in access to said premises.
9.4 Penalty. Any person violating any provision of this
Ordinance or failing to comply with any requirement of this Ordinance
will be guilty of a misdemeanor and subject to a fine of not to exceed
two hundred dollars ($200.00) upon conviction. Each day during or upon
which said person shall violate or continue violation of any provision
of this Ordinance or noncompliance with any requirement of this Ordinance
shall constitute a distinct and separate offense. The violation of any
provision of this Ordinance or the failure to comply with any requirement
of this Ordinance shall each constitute a distinct and separate offense.
9.5 Amendment. This Ordinance or any part thereof may be altered,
repealed or amended at any time and no rights or privileges may ever be
acquired hereby which may not be altered, repealed or modified by the City,
provided, however, that where production units have been previously formed,
well locations have been made from which wells have been drilled, or surface
production facilities have been installed in accordance with the terms of
this Ordinance, or any previous ordinance, such units, locations and
facilities may be continued so long as permittee's well and equipment comply
with engineering standards of this Ordinance or any amendment thereof
regulating the production of oil or gas within this City.
9.6 Severability. If for any reason any section, paragraph,
subdivision, clause, phrase or provision of this Ordinance shall be held
invalid, it shall not affect any valid provisions of this or any other
Ordinance of the City of Corpus Christi to which these rules and regulations
relate.
9.7 Publication. Publication shall be made one time in the
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official publication of the City of Corpus Christi, after final passage,
which publication shall contain the caption stating in substance the purpose
of the Ordinance and reciting the penalty for violation of the Ordinance.
9.8 Waiver by City Council, Any and all provisions of this
Ordinance may be waived by the City of Corpus Christi upon a showing by
She applicant to the satisfaction of the City Council that the planned
manner of operation by the applicant or the equipment to be used by the
applicant will adequately protect the public health, safety and welfare.
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( THAT THE FOREGOING ORDINANCE WAS RR AD FOR THE FI TI AND
PASSE TO ITS SECOND READING ON TWIS THE ! /.(J DAY OF
7g�, BY THE FOLLOWING VOTE: —� _' ^^^"'���"*-- ���--- --
JACK R. BLACKMON
RONNIE SIZEMORE ✓
' V. A. "DICK" BRADLEY JR.
P. JIMENEZ, JR., M.D.
GAGE LOZANO, SR. 1z'
'
KEN MCDANIEL
W. J. "WRANGLER" ROBERTS /
THAT THE FOREGOING ORDINAN W S READ FOR CONDI ME AND S D
TO ITS THIRD READING ON THIS THE DAY OF
BY THE FOLLOWING VOTE:
JACK R. BLACKMON
RONNIE SIZEI.IORE
V. A. "DICK" BRADLEY, JR.
P. JIMENEZ, JR., M.D. Q �—
GABE LOZANO, SR.
KEN MCDANIEL 6G�
W. J. "WRANGLER" ROBERTS
THAT THE FOR G ORDINANC S READ FOR THE HA-1 TIME AND PASSED
FINALLY ON THIS THE DAY OF
ING VOTE: 19� BY THE FOLLOW -
JACK R. BLACKMON
RONNIE SIZEMORE
V. A. "DICK" BRADLEY, JR. `
P. JIMENEZ, JR., M.D.
GABE LOZANO, SR.
KEN MCDANIEL
W. J. "WRANGLER" ROBERTS `
PASSED 41D APPROVED, THIS THE DAY OF 19
ATTEST
CITY ECRETA
APPROVED
lD
DAY 0F
CITY ATT FY
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