An update from AOGC Director Larry Bengal.

1. Arkansas Independent Producers and
Royalty Owners Annual Meeting
Oil and Gas Commission
Update
Lawrence Bengal, Director
October 2018

2. Natural Gas Production Information
• Production Information:
2006 – less 200 BCF; 2014 - over 1 TCF; 2017– 692 BCF. 2018 est 640 BCF
Approximately 90% from the Fayetteville Shale and 10% from the Arkoma Basin.
• AR – consumes approximately 250 BCF per year.
• # of Producing Wells in FS:
– 2006 165
– 2007 574
– 2008 1290
– 2009 2138
– 2010 3033
– 2011 3835
– 2012 4406
– 2013 5022
– 2014 5567
– 2015 5842
– 2016 5586

3. 2014 - 6.7 M bbls
2016 - 5.4 M bbls
2017 - 5.1 M bbls
2018 proj - 5.0 M bbls

4. 2016- 23 permits 2017- 43 permits 2018 “to date” 48 permits

5. Recent and
Upcoming
Commission
Activities and
Actions

6. USDOT-PHMSA UNGS Program

7. AOGC will propose Gas Storage Rules in 2019

8. B-3 Amendment – SWD Well Spacing
• Corrects references to other AOGC rules that
have been repealed, adopted, or amended
since B-3 was last amended.
• Authorizes a (Director approved) location
exception for Class II Disposal wells (not
Commercial Disposal or EOR wells) to be
located closer than 280 feet from a mineral
lease line in uncontrolled production
areas…….
If the offset operator being encroached upon
gives written permission and waives the
requirement of a hearing before the AOGC

9. B-4 Well Transfer Rule (New)
• Rule codifies and clarifies existing
administrative procedures necessary for the
transfer of the operatorship of an oil, gas or
brine production well from one operator to
another operator.
• Rule requires operators to file an
application for hearing (transfer approval)
and post well specific financial assurance
when requesting the transfer of gas wells
that produce at a low volume (less than 25
MCF/day per day).

10. B-7 Temporary Abandonment
• Requires operators to post well specific
financial assurance when applying for
temporary abandonment status for initial 3
year period of temporary abandonment.
Gas well 35K – Oil well 15K.
• Removes AOGC witness requirement for
fluid level tests and makes witnessing
discretionary for AOGC staff.
• Simplifies and streamlines process for
operators to comply with temporary
abandonment provisions through a Notice
of Violation process.

11. B-17 Drilling Pit Requirements
• Clarifies definition of when frac-flow back
fluid ends and produced water fluid begins
from well.
• Allow drill pits constructed for recycling use
to accept produced water, when approved
by both the Director of ADEQ and AOGC.
• Affirmatively states that rainwater, and other
forms of fresh water may be temporarily
stored in drill pits.
• Affirmatively states that two 20 mill liners
with leak detection, as opposed to one 40
mil liner, is permissible for recycling pit.

12. ADEQ Reg. 1 Amendment
• Terminates ADEQ SWD Surface Facility
Permitting Requirements for all SWD wells with
less than 1000 bbls of saltwater storage capacity
on-site.
• SWD Surface facilities with more than 1000 bbls
storage and Commercial SWD surface facilities
will remain under current ADEQ permitting
requirements.
• Effective December 2018
• ADEQ Permit renewals due until amendment
effective.

13. AOGC Implementation Process for
ADEQ Reg. 1 Amendment
• Operators will be notified and SWD surface facility
requested – November 2018
• SWD surface facilities will initially be regulated
under existing B-26 - General Lease Operating
Requirements for tank batteries.
• No specific SWD surface permitting process will
be implemented – will be included in SWD Well
Permit process.
• General Rules B-26 and H-1 and H-2 have been
amended and approved by Commission. Will
begin rule adoption process November 2018.

16. Questions ?
Whose bright idea was it
to take this picture!?