City of Onalaska, TX Drilling and Producing Operations

Generally.

Standard operating procedures under the applicable rules and regulations of the state railroad commission, as well as those ordinary practices adhered to by prudent operators in this area, shall be followed in the setting and cementing of surface casing and oil strings and the testing of surface pipe and oil strings.

(b)

Blowout preventers.

Two (2) fluid-operated blowout preventers shall be used for all drilling or completion operations involving the use of drill pipe casing or tubing after surface casing has been set. The mechanical operation of blowout preventers shall be tested at reasonable intervals, and in addition they shall be tested with pump pressure frequently enough to insure good working order at all times.

(c)

Wellhead assemblies and Christmas trees.

All wells shall be equipped with wellhead assemblies and Christmas trees of working and test pressures as provided in applicable rules and regulations of the state railroad commission, and in addition shall conform with standard practice and procedures used by prudent operators in this area.

(d)

Disposal of rubbish and debris.

Any rubbish or debris that might constitute a fire hazard shall be removed to a distance of at least one hundred feet (100') from the vicinity of wells. All wastes shall be disposed of in such a manner as to avoid creating a fire hazard or polluting streams and fresh water strata.

(e)

Fencing.

All producing wells shall be protected with a six-foot (6') woven fence having a barbed wire guard at the top and a gate with lock.

(f)

Slush tanks and earthen pits.

Only portable slush tanks for mud and water shall be used in drilling and reworking operations, unless an exception is granted by the city council permitting the use of earthen pits. Portable tanks and their contents shall be removed from the drilling site within ten (10) days after completion or abandonment of the well. Earthen pits, if permitted, shall be backfilled and leveled within one hundred twenty (120) days after such completion or abandonment.

(g)

Motive power.

Motive power for all operations after completion of drilling operations shall be electric or properly muffled gas, diesel, or gasoline engines. All pumping wells shall be equipped with electric motors, gas lift facilities, or properly muffled gas or gasoline engines.

(h)

Disposal of salt water and other impurities.

The permittee shall make adequate provisions for the disposal of all salt water or other impurities which he may bring to the surface, such disposal to be made in such a manner as not to contaminate the fresh water supply, present or prospective, or to injure surface vegetation.

(i)

Casing.

(1)

In order to protect the fresh water sands which are the source of water supply for this city, the casing program of all wells drilled hereafter in this city not otherwise excepted from the terms of this article shall include surface casing of new or reconditioned pipe. Fresh water sands to be protected are herein defined as those above a minimum depth of eight hundred fifty feet (850'), or greater depth as stipulated by the state water commission or railroad commission in the event special field rules are adopted. To protect fresh water, a permittee shall set surface casing to the depth stipulated by the state water commission or the state railroad commission, if the special field rules are adopted, but in no instance to a depth less than one thousand one hundred fifty feet (1,150'), and cement with sufficient cement to fill the annulus from the casing set depth to the surface and provide return of uncontaminated cement at the surface.

(2)

Cement shall be by the pump and plug method. Cement shall be allowed to stand a minimum of twelve (12) hours under pressure and twenty-four (24) hours before drilling the plug or initiating the test. After cementing, the surface casing shall be tested by pump pressure of at least seven hundred fifty (750) pounds per square inch. If, at the end of thirty (30) minutes, the pressure shows a drop of one hundred fifty (150) pounds per square inch or more, the casing shall be condemned. After the corrective operations, the casing shall again be tested in the same manner.

(3)

It is controllingly provided, however, that in the event a permittee can establish to the satisfaction of the city council that said fresh water sands can be adequately protected by use of other means or measures, any or all of the foregoing requirements may be waived by the city council.

(j)

Drilling fluids.

Drilling fluids of sufficient weight to exceed the formation pressures of known reservoirs in the area shall be used.

(k)

Drill stem tests.

No drill stem tests shall be taken except during daylight hours, and then only if the test effluent is produced through an adequate oil and gas separator into storage tanks.

(l)

Storage tanks.

No storage tank shall be located within the city limits unless an exception is granted by the city council permitting the installation of a “tank battery” for retaining the production from a lease until its delivery to a purchaser. Such tanks shall be surrounded by an earthen firewall of such dimensions that it can contain a liquid volume equal to one and one-half (1-1/2) times the capacity of the tanks.

(m)

Pipelines.

To remove oil, gas, water, or other products from a well to storage outside the city limits, the permittee is hereby granted rights-of-way and easements on, under, along, or across the city streets, alleys, and sidewalks for the purpose of laying, maintaining, repairing, replacing, and removing pipelines so long as production or operations may be continued under this permit. The permittee, however, shall not interfere with or damage existing water, sewer, or gas lines or other facilities or public utilities located within such rights-of-way or easements. Pipeline crossings of paved or blacktopped streets shall be bored or jacked unless written authorization for open ditching is given by the city council. All pipeline construction and operations shall conform with applicable API specifications, city ordinances, and regulations of the state railroad commission.

(n)

Venting of gas.

No venting of gas from a well shall be permitted within the city limits.

(o)

Abandonment and plugging of well.

Whenever a well is abandoned, it shall be the obligation of the permittee to set a cast bridge plug in the top of all the remaining completion and protection casing sections and a one hundred foot (100') cement plug pumped below and above each such bridge plug, and to set a cast iron bridge plug as low as possible in the surface casing and a one hundred foot (100') cement plug pumped below and above such bridge plug. No surface string or conductor string of casing may be pulled and removed from a well. The production string of casing may be removed from a point one hundred feet (100') or more above the shoe of the protection string. Whenever any such well is abandoned and plugged, it shall be the further obligation of the permittee and the operator of the well to cut the surface casing off at least six feet (6') below the surface of the ground, to place at least a twenty-five foot (25') cement plug in the top of the casing, and to weld the top of the casing completely shut, with the resulting hole being completely filled to the surface of the ground and duly tamped. Any additional provisions or precautionary measures prescribed by the state railroad commission in connection with abandonment and plugging of a well shall be complied with by the permittee.

(Ordinance 45 adopted 8/23/82; 1982 Code, ch. 4, sec. 7(C)(2))