Section 240.460  Modified Drilling Unit

 

a)         Upon application of any person having an interest in oil or gas in a lease or drilling unit, the Department shall schedule a hearing to consider a petition for modification of the location of the standard drilling unit described in Section 240.410, based on geologic or engineering characteristics of the reservoir, relative to the land survey system specified in Section 240.410 and well density specified in Section 240.465 of this Part.

 

b)         Contents of petition shall include:

 

1)         the name and address of the petitioner;

 

2)         the petitioner's geologic or engineering reason for requesting a modified drilling unit; and

 

3)         a legal land description of the drilling unit sought to be established.

 

c)         Execution and Filing

 

1)         The petition to modify a drilling unit in accordance with this Section or establish a special drilling unit in accordance with Section 240.465 shall be filed with the Department offices located in Springfield, Illinois.  The petition shall be deemed filed when it is received by the Department's Division of Oil and Gas.

 

2)         Every petition shall be signed by the petitioner or his representative and his address shall be stated thereon.  The signature of the petitioner or his representative constitutes a certificate by him that he has read the petition and that to the best of his knowledge, information and belief there is good ground to support the same.

 

3)         If after the petition is filed, and prior to setting a hearing date, the Department finds the petition deficient relative to the requirements of subsection (b) above, the Department shall return the petition to the applicant with a statement as to the deficiencies.

 

d)         Notice of hearing shall be given by the applicant to all mineral owners within the boundaries set forth in the application, and to all permittees having oil or gas wells within 1/2 mile of the boundaries of the lease or drilling unit, which are completed in the proposed zone of production, by U.S. Postal Service certified mail, return receipt requested, and by publication in a newspaper of general circulation in each county in which any portion of the proposed lease or drilling unit or units is located, at least 10 days prior to the hearing.

 

e)         Pre-Hearing Conferences

 

1)         Upon his own motion or the motion of a party, the Hearing Officer shall direct the parties or their counsel to meet with him for a conference in order to:

 

A)        Simplify the factual and legal issues presented by the hearing request;

 

B)        Receive stipulations, admissions of fact and of the contents and authenticity of documents;

 

C)        Exchange lists of witnesses the parties intend to have testify and copies of all documents the parties intend to introduce into evidence at the hearing; and

 

D)        Discuss and resolve such other matters as may tend to expedite the disposition of the hearing request and to assure a just conclusion thereof.

 

2)         Pre-hearing conferences may be held by telephone conference if such procedure is acceptable to all parties.

 

f)          Hearing

 

1)         Conduct of Hearing:  Every hearing shall be conducted by a Hearing Officer designated by the Director.  The Hearing Officer shall take all necessary action to avoid delay, to maintain order and to develop a clear and complete record, and shall have all powers necessary and appropriate to conduct a fair hearing and to render a decision on the petition, including the following:

 

A)        To administer oaths and affirmation;

 

B)        To receive relevant evidence;

 

C)        To regulate the course of the hearing and the conduct of the parties and their counsel therein;

 

D)        To consider and rule upon procedural requests;

 

E)         To examine witnesses and direct witnesses to testify, limit the number of times any witness may testify, limit repetitive or cumulative testimony and set reasonable limits on the amount of time each witness may testify;

 

F)         To require the production of documents or subpoena the appearance of witnesses, either on the Hearing Officer's own motion or for good cause shown on motion of any party of record.

 

2)         Every person desiring to participate in the hearing shall enter his appearance by stating his name and address.  Thereafter, such person shall be deemed a party of record.

 

3)         All participants in the hearing shall have the right to be represented by counsel.

 

4)         The Hearing Officer shall allow parties to present statements, testimony, evidence and arguments as may be relevant to the preceding.

 

5)         At least one representative of the Department shall appear at any hearing held under this Section and shall be given the opportunity to question parties or otherwise elicit such information as is necessary to reach a decision on the petition.

 

6)         Where applicable, the following shall be addressed prior to receiving evidence:

 

A)        The petitioner may offer preliminary exhibits, including documents necessary to present the issues to be heard, notices, proof of publication and orders previously entered in the cause.

 

B)        Ruling may be made on any pending motions.

 

C)        Any other preliminary matters appropriate for disposition prior to presentation of evidence.

 

g)         Evidence

 

1)         Admissibility:  A party shall be entitled to present his case by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts.  Any oral or documentary evidence received by the presiding Hearing Officer shall exclude evidence which is irrelevant, immaterial or unduly repetitious.  The rules of evidence and privilege applied in civil cases in the courts of the State of Illinois shall be followed; however, evidence not admissible under such rules of evidence may be admitted, except where precluded by reasonable, prudent men in the conduct of their affairs.  Subject to these requirements, when a hearing will be expedited and the interests of the parties will not be prejudiced, a Hearing Officer shall allow evidence to be received in written form.

 

2)         Official Notice:  Official notice may be taken of any material fact not appearing in evidence in the record if the circuit courts of this State could take judicial notice of such fact.  In addition, notice may be taken of generally recognized technical or scientific facts within the Department's specialized knowledge.

 

3)         Order of Proof:  The petitioner shall open the proof.  Other parties of record shall be heard immediately following the petitioner.  The Hearing Officer or Department representatives may examine any witnesses.  In all cases, the Hearing Officer shall designate the order of proof and may limit the scope of examination or cross-examination.

 

4)         Briefs:  The Hearing Officer may require or allow parties to submit written briefs to the Hearing Officer within 10 days after the close of the hearing or within such other time as the Hearing Officer shall determine as being consistent with the Department's responsibility for an expeditious decision.

 

h)         Record of Proceedings; Testimony

            The Department shall provide at its expense a certified shorthand reporter to take down the testimony and preserve a record of all proceedings at the hearing.  Any person testifying shall be required to do so under oath. However, relevant unsworn statements, comments and observations by any interested person may be heard and considered by the Department as such and included in the record.

 

i)          Postponement or Continuance of Hearing

            A hearing may be postponed or continued for due cause by the Hearing Officer upon his own motion or upon the motion of a party to the hearing.  A motion filed by a party to the hearing shall set forth facts attesting that the request for continuance is not for the purpose of delay.  Except in the case of an emergency, motions requesting postponement or continuance shall be made in writing and shall be received by all parties to the hearing.

 

j)          Default

            If a party, after proper service of notice, fails to appear at the pre-hearing conference or at a hearing, and if no continuance is granted, the Department may then proceed to make its decision in the absence of such party. If the failure to appear at such pre-hearing conference or hearing is due to an emergency situation beyond the parties' control, and the Department is notified of such situation on or before the scheduled pre-hearing conference or hearing date, the pre-hearing conference or hearing will be continued or postponed pursuant to Section 240.130(h).  Emergency situations include sudden unavailability of counsel, sudden illness of a party or his representative, or similar situations beyond the parties control.

 

k)         If the Department finds, based on the reservoir's geological and engineering characteristics, that a modified drilling unit or units is necessary to prevent waste, to protect correlative rights, and to prevent the unnecessary drilling of wells, the Department shall enter an order establishing such drilling unit or units.  Each order shall:

 

1)         specify the location of each drilling unit relative to the land survey system; and

 

2)         specify the set back from the drilling unit boundaries for the location of the oil or gas well on each drilling unit.

 

l)          Order--Final Administrative Decision

            The Director's order is a final administrative decision of the Department, pursuant to Section 10 of the Act.

 

(Source:  Amended at 21 Ill. Reg. 7164, effective June 3, 1997)