i'm guessing 'location exception' is generally wanting to change a drilling permit on where the rig is gonna be located?
A location exception is needed if the operator wants to "crowd" the lease line. Spacing orders from the OCC require a specific distance for a wellbore to be from its lease line based on it's vertical spacing unit. Operators want to drill as much of the reservoir as they can & will request an exception location to get as close as they can to the lease line.
The kick in the head for me is that IF one or more vertical wells are producing in an 80 acre unit, the OCC will allow a horizontal well to drill through the 80 acre units and hold the entire 640 acres, which prevents others from drilling another horizontal well in the section..So, my questions: IF the vertical wells that are holding 80 acres were properly spaced for efficient production of the reserves, how can another wellbore come through there & not capture many of the reserves that were supposedly going to be produced by the original vertical well?