Horizontal Drilling: Regulatory and Contractual Implications
Keywords:Energy Law, Petroleum Law
AbstractRecent technological developments have allowed the petroleum and natural gas industry to drill horizontal wells on a cost-effective basis. Although the technology is still relatively new in Canada, it has potentially significant benefits to the industry, including greater flow rates per well and greater ultimate recovery of petroleum substances. It has been estimated that by 1995 there may be as many as 450 horizontal wells drilled in Alberta per year. The implications of horizontal drilling are that the current regulatory schemes and certain of the common agreements utilized in the industry do not readily accommodate it. The authors discuss some of the legal implications raised by the new technology and examine problems with the current regulatory schemes and certain industry agreements.
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