Regulation of Well Spacing in Oil and Gas Production

Abstract

The common law did not enforce any particular pattern of spacing of wells on early drillers for oil and gas. The result was reduced production at greatly increased cost. The author traces the development of spacing legislation in the United States and Canada, particularly in Texas and Alberta, and summarizes the considerations which should determine the most profitable spacing policy for all parties concerned. After exploring the use of unitization in petroleum, production, it is concluded that compulsory unitization eliminates the need for spacing legislation as the objectives of such legislation will have already been achieved.