Replies to This Discussion

Permalink Reply by Billy Park Whyde on July 21, 2012 at 9:30am

  What mandates the need for pooling in a location? With the average that is leased in Ohio and areas available for lease I think it would be hard to establish a need drill a well in any one particular spot. 

 Question to plaintiff:   How many parcels of land do you have leased in the state? 

 Answer 275,000 acres.

  Question can you explain why this parcel is necessary and the value it represents  to your company?

  Option A.  We just want  to do what we want

              B. We just can't live without it.

             

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Permalink Reply by Calla on July 21, 2012 at 6:49pm

The following came from this website.  http://www.steptoe-johnson.com/know-how/pooling-statutes-in-ny-md-o...  I think the important thing is that they can only use it 5 times per year.

 

"Let’s move to Ohio - another state that has a statute in place that appears to be sufficient to regulate pooling of horizontal shale wells, both in the Marcellus, Utica and all formations. However, the issue with the Ohio statute is mainly process. The first step in the Ohio process is to file your application and have a hearing in front of the Oil and Gas Technical Advisory Board or Committee. However, this committee, meets only once per quarter. In addition, only five applications per entity may be filed in any given year. Now, there is a regulation that allows the committee to meet more than four times per year, either upon petition of the chairman or upon a motion by two of the members, but our research shows over 20 years this has only been done one time. So, while Ohio has a statute that on its face looks like it will promote large scale development, the process may actually impede such large scale development and pooling of horizontal shale wells. In addition, historically, Ohio has not looked at forced pooling as a method by which all units should be formed. They don’t look at pooling as a mechanism to replace what they call fair and aggressive leasing programs. They prefer that forced or statutory pooling only be used in cases where a lessor has been offered very reasonable terms and just refuses to accept or just wants to impede development, or in cases of missing heirs. So, in summary, while Ohio has a statute on its book, it is unknown whether it can be used to promote such large scale development and pooling resources."

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Permalink Reply by Kathleen on July 21, 2012 at 7:00pm

When I read this law (for some reason I cannot link it here) I wonder if for each application they can put in more than one landowner or trust and that's application one or is it clear one application per parcel. It never seems to say each application can only have just one parcel. I'm pasting a piece of the law to show what I mean since it says landowners not landowner.
The application shall include information as shall be reasonably required by the chief of the division of oil and gas resources management and shall be accompanied by an application for a permit as required by section 1509.05 of the Revised Code. The chief shall notify all owners of land within the area proposed to be included within the drilling unit of the filing of the application and of their right to a hearing. After the hearing or after the expiration of thirty days from the date notice of application was mailed to such owners, the chief, if satisfied that the application is proper in form and that mandatory pooling is necessary to protect correlative rights and to provide effective development, use, and conservation of oil and gas, shall issue a drilling permit and a mandatory pooling order complying with the requirements for drilling a well as provided in section 1509.24 or 1509.25 of the Revised Code, whichever is applicable. The mandatory pooling order shall:

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Permalink Reply by Kathleen on July 21, 2012 at 7:39pm

http://codes.ohio.gov/orc/1509.27
I got it to work. :0) I thought to get a good feel all of it has to be read. It's not very long.v It even goes on to say
(C) Describe each separately owned tract or part thereof pooled by the order;
(D) Allocate on a surface acreage basis a pro rata portion of the production to the owner of each tract pooled by the order. The pro rata portion shall be in the same proportion that the percentage of the owner’s acreage is to the state minimum acreage requirements established in rules adopted under this chapter for a drilling unit unless the applicant demonstrates to the chief using geological evidence that the geologic structure containing the oil or gas is larger than the minimum acreage requirement in which case the pro rata portion shall be in the same proportion that the percentage of the owner’s acreage is to the geologic structure.

To me it sounds like mutibale tracts can be in one order but I may be reading this wrong.

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Permalink Reply by Dan on July 21, 2012 at 11:50pm

Kathleen, 

This could be another or the main reason for CHKs and any other drillers current push to re-write leases for larger unit size.  Do some leases have clauses that can pool folks into non adjacent units to be held by production and if so could they be bundled into a single application for forced pooling?  Does Ohio even have a maximum unit size?  Pro-rating based upon the rights owners surface foot print to the geologic struture.......that would and should require some good verifiable siesmic study.  Alot of siesmic studies are being done.  I would think if an O&G conpany takes a mineral owner to task with this the siesmic data should be made public so it can be scrutinized at the very least. 

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Permalink Reply by Kathleen on July 22, 2012 at 8:51am

Hi,
Our first lease had the language about pooling non adjacent land which of course we don't sign. In Ohio the drilling units have to be 40 acres or more. That's the last I've read and I'm sure it's for the Clinton wells. I think you have to have 20 acres for a well to be put on a certain parcel.
The rest I don't know....
I do feel this law reads landowner friendly and so far I haven't heard of any forced pooling its just unclear to me how many landowners can be included in one application. I honestly can see this working for a group of foreclosed/abandoned parcels on the edge of say Youngstown and I bet would be received in better light by the chief of gas and natural resources.

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Permalink Reply by Billy Park Whyde on July 22, 2012 at 9:06am

  I personally do not think that forced pooling will be a norm in Ohio, The basic concept of private property weighs heavily while the issue of drilling is not one of imminent domain. I can not perceive where a drawn out legal battle with big players such as the Sierra Club  in a effort to halt drilling would allow it to be a cut and dry matter without taking it to the supreme court. The due process would have to be through.   

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Permalink Reply by Kathleen on July 22, 2012 at 12:46pm

I completely agree with you. I think any co willing to ask for it better have a good timeline showing they bent over backwards trying to get this land in the unit.
My question though is if they ever do try, is it one parcel per application or one application can cover a few parcels for that unit or application.
Again for anyone reading this to me this law looks very landowner friendly and I would not fear being forced pooled unless they offered the landowner the world and it was still a no and it's a big deal to go around that one parcel which effects so many neighbors getting their minerals extracted.

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Permalink Reply by bo boboski on July 22, 2012 at 2:03pm

I"m pretty sure that the law was put in effect to protect the landowners from one of their greedy neighbors trying to hold out for more $$$. Dont really think the O&G co.s will need to use the forsed pooling law very often ,cause most  people will finally sign on when they know they are getting what their neighbors got. It could be an issue if thier neighbors all got scammed into a $50. pr acre deal way back when. If they can only do it 5 times ,they will try their best to lease all in the unit if possible. Glad to be in Ohio!.

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Permalink Reply by Billy Park Whyde on July 22, 2012 at 3:44pm

 The law has several aspects to it. One private property, it's a two way street If I want to allow them to drill upon my property fine if I don't want them around my bass pond I built by myself then fine stay out!

   Two  establish a reason, proof of having a significant amount of land that would be impacted if a persons property voided the use of that land.

   Three , insure that a fair price was established for use of land if need be.

   I am pro drilling but I am for property owners rights, from a private owned bar to allow smoking if they care to or ban it if they want.  To grow shrimp  instead of frogs if it's your property. 

  Without this you may as well throw your hands up and give it to the government.,

Permalink Reply by Ron Eiselstein on July 24, 2012 at 10:55pm

I like shrimp, but what is wrong with frogs Billy?

Permalink Reply by joe pierson on July 23, 2012 at 10:38am

Perhaps another way to look at is how many are integrated using forced pooling in other states, here is force integration hearings list for one month in arkansas, some interesing reading, the first one listed is as good as any (read the resume of efforts to lease Exhibit C for some interesting stuff)

http://www.aogc2.state.ar.us/Hearing%20Applications%20Archive/2009/...

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