R 324.206 Modification of permits; deepening permits; change of ownership.

Rule 206. (1) A permit shall not be transferred to a location outside of the drilling unit. (2) A permittee of a well who has not initiated drilling of a well shall not do either of the following: (a) Change the well location within the drilling unit without the prior approval of the supervisor or authorized representative of the supervisor. To receive approval, a permittee shall return the permit to the Lansing office of the supervisor together with a revised application with corrected attachments and supplements. If the permittee requests a change in the well location greater than 165 feet from the permitted location, then a new permit and an additional fee are required. If the permittee requests a change in the well location to a location less than 165 feet from the permitted location, then the change will require a revised permit and no additional fee. A change of location for an injection well, regardless of distance, requires a new permit and an additional fee. Drilling shall not begin until the new permit or revised permit has been issued by the supervisor or authorized representative of the supervisor and posted at the drilling site. (b) Change the method of drilling, casing and sealing programs, or other conditions of the permit without the prior approval of the supervisor or authorized representative of the supervisor. To receive approval, the permittee shall return the permit to the Lansing office of the supervisor together with a revised application with corrected attachments and supplements. If the permittee only requests a modification of the existing permit conditions, then an additional fee is not required. Drilling shall not begin until the revised permit has been approved by the supervisor or authorized representative of the supervisor and posted at the drilling site. (3) A permittee of a well who begins the drilling of a well and encounters drilling problems or other drilling conditions that necessitate a change shall not do either of the following: (a) Change the well location within the drilling unit, other than as provided by R 324.203, without the prior approval of the supervisor or authorized representative of the supervisor. To receive approval to change the well location, the permittee shall return the permit to the Lansing office of the supervisor together with a revised application with corrected attachments and supplements. Drilling shall not begin at the new location until the revised permit has been issued by the supervisor or authorized representative of the supervisor. (b) Change the method of drilling, casing and sealing programs, or other conditions of the permit without the prior approval of the supervisor or authorized representative of the supervisor. To receive approval to modify an existing permit condition only, the permittee shall contact the supervisor or authorized representative of the supervisor by letter, telephone, or visit and explain the drilling circumstances and request the necessary changes to the permit. The supervisor or authorized representative of the supervisor may give verbal approval to modify the permit with conditions for additional reporting requirements by the permittee. If approval to modify an existing permit is granted, then the revised permit and corrected attachments and supplements shall be filed, within 10 days, at the offices of the Michigan Department of Environmental Quality, Office of Oil, Gas, and Minerals, P.O. Box 30256, Lansing, Michigan 48909. An additional permit fee is not required. (4) A permittee of a well who desires to deepen a well below the permitted stratigraphic or producing horizon where well completion has occurred shall file an application for a deepening permit. The application shall set forth, in detail, the new proposed total depth and the plan for casing and sealing off the oil, gas, brine, or fresh water strata to be found, or expected to be found, in the deepening operation. The deepening operation shall not be commenced until the application has been approved by the supervisor or authorized representative of the supervisor. A deepening permit and an additional fee are required. (5) A permittee of a well who desires to continue the drilling of a well below the permitted depth, but within the permitted stratigraphic or producing horizon where drilling completion or well completion has occurred, shall file an application for change of well status pursuant to R 324.511. The application shall set forth, in detail, the new proposed total depth and the plan for casing and sealing off the oil, gas, brine, or fresh water strata found, or expected to be found, when drilling is continued. The approval of the change of well status shall serve to revise the permit to reflect the new permitted depth. The continuation of drilling shall not be commenced until the application for change of well status has been approved by the supervisor or authorized representative of the supervisor. To obtain approval to continue the drilling below the permitted depth, but within the permitted stratigraphic or producing horizon with the drilling rig then on location, the permittee shall contact the supervisor or authorized representative of the supervisor by letter, telephone, or visit and explain the circumstances for the request to continue the drilling. The supervisor or authorized representative may give verbal approval to continue the drilling below the permitted depth, but within the permitted stratigraphic or producing horizon. If approval to continue the drilling is granted, then the permittee shall file the application for change of well status pursuant to R 324.511, within 10 days of approval, at the offices of the Michigan Department of Environmental Quality, Office of Oil, Gas, and Minerals, P.O. Box 30256, Lansing, Michigan 48909. An additional permit fee is not required. (6) If a permittee of a well conveys his or her rights as an owner of a well to another person, or ceases to be the authorized representative of the owner of a well, before final completion, then a request for the transfer of the permit to the acquiring person shall be submitted by the acquiring person to the supervisor at the offices of the Michigan Department of Environmental Quality, Office of Oil, Gas, and Minerals, P.O. Box 30256, Lansing, Michigan 48909, on forms as prescribed by the supervisor. The transfer of the permit may be approved upon receipt of a properly completed request, including the signatures of the permittee of record and the acquiring person, and upon the filing by the acquiring person of the conformance bond or a statement of financial responsibility as required by R 324.210. Pending the transfer of the existing permit, the acquiring person shall not operate the well. The acquiring person shall file an organization report pursuant to R 324.201(2)(h). (7) A permit for a well shall not be transferred to a person who has been determined to be in violation of any of the following until the permittee has corrected the violation or the supervisor has accepted a compliance schedule and a written agreement has been reached to correct the violations: (a) The act. (b) These rules. (c) Permit conditions. (d) Instructions. (e) Orders of the supervisor. (f) An order of the department of environmental quality. An additional conformance bond covering the period of the compliance schedule may be required. The conformance bond is in addition to the conformance bonds filed pursuant to R 324.212(a) or (b). (8) If the permittee of a well is under notice because of unsatisfactory conditions at the well site involved in the transfer, then the permit for a well shall not be transferred to a person until the permittee has completed the necessary corrective actions or the acquiring person has entered into a written agreement to correct all of the unsatisfactory conditions.