SECTION 165:10-1-25. Replacement well

(a)   Approval by the Conservation Division of a Notice of Intent to Drill (Form 1000) for a second well to be drilled in a common source of supply in a single drilling and spacing unit as a replacement well may be permitted when:

(1)   The replacement well is to be drilled at a location permitted for the common source of supply by either an order or rule of the Commission; and

(2)   The operator of the replacement well is either the operator or a working interest owner in the original unit well; and

(3)   The Notice of Intent to Drill for the replacement well is accompanied by an affidavit from the operator, stating that on completion of the second well as a commercial producer, the common source of supply in the first well shall be plugged off immediately. The affidavit shall be attached to Notice of Intent to Drill.

(b)   A replacement well shall not receive an allowable to produce oil or gas from the same common source of supply as the first well until:

(1)   Said common source of supply in the original well in the drilling and spacing unit is plugged off; or

(2)   The Commission issues an order authorizing the replacement well as an increased density well for said common source of supply; or

(3)   The Commission issues an order reforming the drilling and spacing units in said common source of supply thereby placing the original well and the replacement well in different drilling and spacing units for the common source of supply.