by Tom Lindley

OKLAHOMA CITY – The Oklahoma Corporation Commission may revise some long-standing rules in an attempt to keep up with the explosion of horizontal drilling in the state.

In 2003, only one of every six to seven wells was horizontal. Today, one of between every two to three wells that is drilled is a horizontal well.

"I see more and more being drilled," Commissioner Dana Murphy said last week.

Because the future of oil and gas in Oklahoma might not look anything like the past, Murphy is spearheading a series of work group sessions inside the Corporation Commission to discuss possible amendments to drilling rules that date back more than 20 years and do not reflect recent advances in horizontal drilling techniques.

Nowhere is it more apparent than in the Anadarko Woodford and Arkoma Woodford shale plays in western and southeastern Oklahoma , which Murphy said might require immediate attention because of the new technology being employed to tap into their vast potential.

As a result, Murphy said the three-member commission may soon consider whether to propose new rules to the Legislature this year that would adjust setback limits to allow for longer laterals in the Woodford fields.

"Our horizontal rules are 20 years old and were designed for when most people were drilling for oil, not gas," Murphy said. "Since then, our rules and regulations have not kept up with advancing technology."

As part of a two-prong approach, Murphy also is a driving force in a series of town hall meetings that have been held around the state to address concerns about the new drilling techniques.

The third of four such meetings will at 5:30 p.m. Monday at the High Plains Technology Center in Woodward.

Murphy said the meetings are important because the increase in horizontal drilling activity poses concerns for surface owners, mineral owners, producers and others.

The National Association of Royalty Owners and the Oklahoma Energy Resources Board also are a part of the meetings, which feature presentations by oil and gas producers on horizontal drilling and hydraulic fracture stimulation.

Previous meetings have been held in McAlester and Weatherford, and a fourth meeting will be April 26 in El Reno .

"If I look from the beginning in McAlester to Weatherford, I can tell from those parts of the state there is a different familiarity with oil and gas history," Murphy said. "The western side understands the drilling of vertical wells, while McAlester has some history, but it's not the same. For many, though, the first well they've had drilled on their land has been a horizontal well and that makes a difference in the questions they ask."

For example, Murphy said mineral owners have questions about how horizontal drilling technology will ensure that gas from their section isn't being drained by another section.

Much of the group's time has been devoted to discussing the commission's need for more discretion in addressing issues that arise with unconventional reservoirs, such as the Woodford.

Some of the proposed changes under discussion include: the expiration of horizontal units after one year, the setback requirements for horizontal wells, the practice of measuring setbacks from the point of entry into the formation rather than the perforations, the coordination of hydraulic stimulations of offset wells, separate allowables for increased-density wells in a unit, and procedures for interim orders on location exceptions.

Murphy said the first phase of the process will likely involve rule changes that the majority of interested parties could agree upon, such as defining conventional and unconventional resources, looking at different setbacks and exceptions to setback requirements given that many lateral lines now extend well beyond the current 660-foot limit.