Unitization - Rules & Regulations

What are the rules and regulations in regards to Unitization in OH & PA. 

(1) Do the respective states have any imput into the sharing of royalties amongst mineral owners? 

(2) Does the Oil & Gas Lease operator dictate size, shape and sharing of revenues? 

(3) Does the mineral owner have any imput or is the operator's decision final regarding these matters?

 

Thanks

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0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on April 9, 2012 at 3:54pm

Hi John,

there is a discussion where we are presently speaking of some of these questions at this link (on main forum page)

http://gomarcellusshale.com/forum/topics/comment-on-the-gas-company...

I just found your discussion and I do like the way you have the questions stated....yet each question basically can be answered to what is on the present lease in the clauses that the Lessor and Lessee have in existance now.   If there are states that override any contractual obligations due to having to enact a state law regarding unitization rules because of abusive uses of unitization to landowners (lessors)....and they sure need to....it would be nice to know.

however, I did find this info at this site:

http://www.pagasleaseattorney.com/blog.html?start=5

 

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on April 9, 2012 at 8:32pm

John, just found this for you as well as me and others....

http://fracfocus.org/regulations-state  (i haven't clicked on past this page yet just saw it covers various states)

 

finally I found what I have looked for all day and yesterday...

http://www.pacode.com/secure/data/025/chapter78/chap78toc.html

Permalink Reply by alan wenger on June 15, 2013 at 9:52pm

See blog at www.hhmlaw.com on new Ohio unitization application rules, with ink to the rules out last week.

Permalink Reply by Joseph-Ohio on June 16, 2013 at 7:53am

Thank you for your very important and informative post.

Can you speak to one major compound question I have ?

If a landowner is leased by an O & G Company and then another O & G Company wants to force that landowner into a unit; does opening negotiations with that landowner (by the O & G Company simply making him a new offer) then overrule the landowner's original lease ?

How could it (by law of contract - the original lease being the binding contract) ?

 

Permalink Reply by Joseph-Ohio on June 17, 2013 at 8:38am

Also Alan, and from our landowner perspective; we find the new "Forced Pooling / Forced Unitization" rules remaining deficient in that we think such rules should apply to only the long, fractured, horizontal / lateral bore leases and not also the conventional (albeit deep) vertical bore wells. 

Why should conventional vertical bore wells be forced / pooled into a larger unit ?

That only serves the O & G Companies - and provides no incentive to the Landowners - leased or un-leased.

Co-relative Rights Served ? - Not !

All only our (my family's) opinion.

Permalink Reply by Joseph-Ohio on June 17, 2013 at 8:52am

We think (my family and I, only speaking our opinion, from our landowner's perspective), that More O & G Company restrictions on the "forced pooling / forced unitization" issues as they  rightly should only apply to the Utica / Point Pleasant fractured extended length horizontal lateral wells are a good thing.

Why should it be so easy for any O & G Companies to change terms and conditions of existing leases by simply buying them from the original lessee; or including un-leased acreage in a drilling unit without 1st negotiating a Fair landowner cognizant Utica class leasehold with the landowner for these special high production landowner conglomerated wells ?

Permalink Reply by Keith A Williams on June 17, 2013 at 10:39am

Joseph-Ohio,

I believe that the landowners would be adversely affected if you limit any law to one formation. I think that the people in PA would be quick to point out that they are having problems because many of their laws are based on a depth limit (below the onondaga). Some of the laws they need to apply do not because the Marcellus is ABOVE the onondaga layer.

I believe the laws may need to be classed by the type of well. Vertical or horizontal would be the 2 classes we have now. Another way may be the type of producing formation (shale and sandstone).

Just think if they write all the new laws just for the Utica and then the drillers start to explore the Upper Devonian, Middle Devonian, or the Queenston shales just to name a few. What would you do then?

IMHO

Keith

Permalink Reply by Joseph-Ohio on June 17, 2013 at 10:54am
Makes sense to us also.
More sense than confining remedy to only the Utica / Point
Pleasant.
One set of rules for long fractured horizontals and another for
conventional verticals then.
Sounds more correct to us also.
Permalink Reply by sldouglass on June 23, 2013 at 4:44pm

In Texas they have something called the Railroad Commission that handles it all - pretty sophisticated.  You might want to check it out.  Next to nothing in Pa [in practice] and nothing very sophisticated in Ohio.  Probably the most logical unit size for sharing would be what is produced from one well  from the involved leased lands - maybe 50 acres or less in the shales.  Larger units, for the most part seem to be just to serve the interest of the Lessee-Producer who wants to extend as many leases as possible beyond the primary term.

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