(a) The owner or operator of any well put down for the purpose of exploring for, or producing, oil or gas, shall, during the course of drilling, case off all fresh or salt water from each oil-producing or gas-producing sand encountered while drilling, the casing to be set in the well in such manner as to exclude all water from penetrating the first into a lower oil-bearing or gas-bearing sand, the well shall be cased in such manner as to exclude all fresh or salt water from all oil-bearing or gas-bearing sands encountered during the course of the drilling operations.
(b) Should any well so drilled produce oil or gas in paying quantities through the first or any succeeding oil-bearing or gas-bearing sand, the oil or gas shall be conserved by either casing or mudding it off, so as to confine it in the gas-bearing or oil-bearing sand where found.