What is the distance a well bore (not the pad) is required to be away from unleased property in PA?

This is not a rule of capture question.  I believe that a well bore has to stay 1100' away from any unleased property in PA.  TX law requires a distance of 330'.  Is 1100' to much?  Rule of capture on a horizonal well is approx 300' from each lateral with spacing approx 500' between each of those laterals.   Any thoughts?

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Permalink Reply by Been There on October 21, 2011 at 12:25pm

Frank and Jim - Yes very good discussion. Two comments for consideration:

First. Garza deals with a conventional reservoir, a tight, lenticular sandstone that is abnormally pressured and extends over 2000' of vertical section. All of the wells drilled in play and in the field in particular are vertical wells and all of the wells have been traced since its discovery in the early 70's. The original Field Rules provided for separate completions in the various lenses in the overall Vicksburg section and 160 acre spacing within a lease or a unit. So you had many individual completions and recompilations as lenses depleted. Lease line offsets in the field were 467'. Field rules were subsequently revised to allow 40 acre spacing with "optional" 20 acre diagonal offsets between wells. Most importantly, all of the reservoirs (lenses) of varying thickness and aerial extent were allowed to be commingled into a single completion. What resulted was an orgy of drilling and massive frac jobs that might result in a frac wing length that would extend far beyond 467' within a single lens with the right combination of aerial extent and orientation. The question that arose in Garza was one of both implied and express covenants. If lessor A and lessor B lease to lessee C, and C completes a well on A's land that is beyond 467' from the lease line but is fraced such that the frac wing extends across the lease line to B's tract, does C have an implied duty to drill an offset on B's land to protect B against drainage? That is the implied covenant question. Now, what if B has an express compensatory royalty provision in his lease with C that states if a well is drilled within 467' OR where drainage is occurring, C must drill a well on B to protect against such drainage OR PAY royalty to B to compensate against such drainage? That is the express covenant question. Now for the Carol Merrel and the Box question - if A and B are siblings that inherited half of Grandpa's 40 acres and a mule and they each own the mineral rights under their respective 20 acres, can you imagine how edgy things are at Thanksgiving at Gramma's? I promise, I couldn't make this up. So the lesson for lessors and legislators in areas new to complicated gas plays is to think about every hypothetical and provide for them in your lease.....

 

Jim - I want you to consider the following when the term "forced pooling" is used. The "forcer" is not just the lessee or operator - mineral owners should be able to force their way into a unit as well. This happens a lot in the "square corner" states that have forced pooling (or integration, unitization or whatever they call it in ND, OK, AR, NM et al). My personal opinion is that forced pooling regulations, properly written and fairly enforced, are in the best interests of all players, mineral, royalty, overriding royalty and operated/nonoperated working interest owners. That will not happen if forced pooling is drafted in such a way that it becomes simply a weapon for operators and lessees.

 

I am off to watch some high school football, hope everyone has a great weekend.

Permalink Reply by Frank Walker on October 21, 2011 at 1:09pm

Miogyp

Appreciate very much the extended explanation regarding Garza.  Thanks.  I was not previously aware of the additional details you have highlighted, and in particular not aware the fracing was taking place in vertical wells!  With the information you have provided, it now appears Garza does not have the applicability I once thought was the case to our situations here in PA.

As for the remainder of your explanations, it does get pretty deep.  I'm a little shaken that equally complex legal entanglements surely exist, or soon will, here in PA.  And our courts (and existing laws) are woefully, virtually irrevocably, indeed laughably behind the curve on all these things.

Thanks again for your post.  And greetings from Pennsylvania, O&G law kindergarten.

Permalink Reply by Bill Gunner on October 21, 2011 at 2:08pm

Myogyp,

your issue is also being discussed on another forum:

http://www.naturalgasforums.com/index.php?topic=13639.0

Permalink Reply by Rodney T Hytonen on February 14, 2014 at 8:59am

Fracking has been legally defined as actionable trespass in West Virginia since spring 2013.

This is true even for leased property if originating from another separately owned property,

as fracking is definable under WV law as DAMAGE.

 

Poisoning the soil - dumping toxins- is harm.

Permalink Reply by pg guy on February 18, 2014 at 2:24am

I am guessing that the trespass issue relates to the fact that the frac would cause alteration of the target formation and also allow extraction of the hydrocarbons from beneath the tract neighboring the one that was frac'ed into, for which the frac'ing operator has no legal access rights, whether at the surface, or at depth.

I agree that "poisoning the soil - dumping toxins - is harm."  But what does that have to do with frac'ing?

At  1,000' to 12,000'+ underground there is no soil, only shale, sandstone, similar matter, plus the hydrocarbons, brine and other minerals. 

And "dumping toxins" could be a criminal act, unlike selectively injecting them, in a controlled, scientifically designed manner, into a narrowly defined, subterranean environment, already saturated with toxic substances.

 

Permalink Reply by NY Gas Rights on October 24, 2011 at 5:18am

Typical of most lawyers and professors in Pennsylvania; he is incorrect. There is no gray area involving fracking from horizontal bores. Rule of Capture is the law of the land and he should have already known this. An unleased parcel can not be drilled into; this would be trespass. A bore can run along side of an unleased property and that property can be fracked without it being trespass; this is Pennsylvania case law that has already been decided. A competant attorney would have already studied the case and known this. Most good attorneys in oil and gas already work for the oil and gas industry. The rest of the lawyers are running (and charging) on ego only.

However, this only applies to the Marcellus Formation and eveything above the Onondaga Horizon. Deeper formations and the Conservancy Law is another area of confusion for most lawyers in Pennsylvania. And as always, the confused lawyers will still charge their fees as if they understand the difference.

Permalink Reply by Been There on October 24, 2011 at 7:03am
NY - not sure why you say an unleased parcel can not be drilled into. It can and it has. Trespass, maybe, but rights of consenting co-tenant need attention. Question is, now what?
Permalink Reply by Frank Walker on October 24, 2011 at 2:05pm

NY

Kindly cite the case or cases so I and others can confirm your statement.

I'm neither a lawyer nor a professor.  But I do actually live in Pennsylvania and I follow this matter closely as a lay person.  I'm unaware of any PA frac trespass case law whatsoever on this involving Marcellus drilling, or other drilling for that matter, though I'd be less likely to be aware of the latter.

Thank you.

Permalink Reply by gene f on October 20, 2011 at 9:52am

Maybe I don't understand the issue, but, i think the "Practical" answer is 330 feet.

The answers given deal correctly with the standard drilling law and rule of capture;  but don't account for the Oil and Gas Conservation law and it's restrictions and benefits.

The O&G Conservation law sets the 330 feet offset for a "deep" well drilled below the Onondaga layer, which is below the Marcellus. While a company does not have to drill below that layer and come back up to the Marcellus, I'm told most do because then under the O&G conservation law they can drill multiple wells closer than 1000 feet. So, to get many wells ( horizontals) from the same pad, there is an advantage to going the O&G route and taking the resulting limitations.

You may want to check this with a lawyer that works with PA gas leases. Lots of them in NEPA.

Permalink Reply by Sam Clark on October 27, 2011 at 8:07am
Gene F. is correct the 330' setback rule applies only to "Conservation Wells".  It is also correct that many operators were permitting Marcellus wells as "conservation wells" to get around the 1000' spacing requirment (min. 900' with coal owner consent) imposed by the Coal and Gas Resource Coordination Act.  However, the later Act was amended (in May 2011 I believe) provide relief from the 1000' spacing rule by allowing for "well clusters" within 2000' of another "well cluster" or 1000' feet of another well, and eliminating the minimum spacing where the operator gets the coal owners consent. 
Permalink Reply by Brandon Nuttall on October 24, 2011 at 2:25pm
It is a rule of capture question as spacing between wells and well bores is partially engineering (how a reservoir works) and partly the protection of correlative rights. I'm from Kentucky where the spacing regulations differ by whether a well is drilled for oil or gas, whether it is in an area with coal resources, and the depth of the well (true vertical depth not measured depth). Kentucky regulations apply to the surface location and all along the path of a wellbore to the target location including deviated and horizontal wells. It is my understanding that the Pennsylvania spacing regulations assume vertical wells and apply to the surface locations.
Permalink Reply by fred on October 27, 2011 at 8:36am

I thought they changed the right to capture law in PA? Are any of the drilling company drilling to the Trenten Black Rock?

 

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