In an effort to increase deep gas and oil production, the Minerals Management Service (MMS) published a proposed rule last week in the Federal Register that would give increased drilling time to leaseholders who plan to drill ultra-deep wells (deeper than 25,000 feet).

The rule would allow MMS to grant suspensions of operations (SOO) to operators who intend to drill such wells. MMS noted that due to the added complexity and costs associated with planning and drilling an ultra-deep well, more time may be needed for exploration and development. In such cases, the lease term could be extended through a SOO. MMS expects this to lead to increased drilling of ultra-deep wells and increased domestic production.

The proposed rule would encourage drilling of wells to depths of at least 25,000 feet true vertical depth sub-surface by granting an SOO in certain situations:

Although some leases with 10-year primary terms are issued in deep water, they are not covered by the proposed rule, because MMS believes that 10 years is sufficient to explore and develop such deep prospects.

The comment period for the proposed rule closes on March 16. Comments may be submitted to MMS at https://ocsconnect.mms.gov/pcs-public/ or by email rules.comments@mms.gov. Details of the proposed rule are available at https://www.regulations.gov/freddocs/05-02747.htm.

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