Should a licensee or lessee discover oil or natural gas in a new pool or reservoir, he/she shall make a request to the Minister for a discovery well designation. The Minister may designate a discovery well where satisfied that the well is in a new and separate pool or reservoir. A licensee or lessee who has a well designated as a “discovery well” may apply to the Minister for a discovery well production rate (in a form set out by the Minister), which is required prior to commencing any production. Up to three additional wells may be drilled in a discovery well reservoir or pool and may be produced at the approved discovery well production rate for a period of 12 months from the finished drilling date of the discovery well.
In order to drill a fifth well within a new discovery well pool or field or continue production in the pool or field beyond the 12 months from the discovery well finished drilling date, the licensee or lessee must make an application for approval of a development plan. The development plan application will contain all information and data regarding reservoir characteristics and reserve assessments and clearly detail the strategy for managing and developing the new pool or field using good production practices.
An annual update of the approved development plan will be required which will include all new and relevant data, operational highlights and reserve assessments up to the preceding year end and planned development operations and timelines for the upcoming year.
A licensee or lessee has the exclusive right to produce oil and natural gas and/or by-products from the respective licence area or lease area, however, production shall not commence from a well until the licensee or lessee has received an approved production rate for that well, whether it is a discovery well or a development well. Other approvals are required by the Department of Environment and Local Government.