land boundaries

Now that Chesapeake has purchased  Anschutz, my 250 acres is surrounded by land leased to Chesapeake. What stops a company from drilling on adjoining land and sucking all the gas out from under the neighboring property. How can one tell how far the laterals are extending?


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Permalink Reply by Frank Walker on November 11, 2010 at 12:17pm
They cannot drill beneath your land without leasing you. Doing this is against the law.

Unfortunately it might not be necessary for them to drill your land in order to steal your gas. If they drill alongside your property and then frac, the frac outreach could easily include your shale. Bear in mind your shale will not yield up large quantities of gas without being fracked. And what gas they might obtain through natural fissures and fractures in the shale belongs to them under the tenants of PA law (Rule of Capture). You should not worry about this since you cannot control it and it is not illegal.

But the Rule of Capture does not address fracking of your shale, which is your greatest jeopardy. This matter also remains untested in our PA courts. Should drilling commence near your (unleased) land, your lawyer might advise you to place the driller on notice formally that you will consider fracking of shale belonging to you, and injection of frac fluid into your property, to be a trespass. This is a matter for you and your lawyer to decide.

Beyond that I don't think there is much else you can do . . . . except perhaps either to lease your land or else maybe to engage a driller and drill your land yourself. If you decide on the latter course, better to do your drilling prior to drilling on neighboring property. That way you get to legally capture their gas.
Permalink Reply by Mike Knapp on November 12, 2010 at 5:23am
Frank,

PA mandates a 330' setback from property lines. Most experts estimate fracking does not go much further than 250' beyond the wellbore. No one is going to be sucking out gas from under anyone else's property. It can certainly happen with shallow wells, but not Marcellus.

And I would love for someone to walk into a lawyers office and ask the lawyer to sue a drilling company on the basis that they might be injecting water into microscopic fissures a mile and a half under the ground. and call it trespassing. They would get laughed out of there in an instant. There is clear, established law that states how this works, and there is no way around it (not that there would be any need to, in this case).

If the poster has 250 acres of land surrounded by Chesapeake, it's probably a good idea to sign on with Chesapeake or he may well end up on an undrillable island, or get force pooled for much less than he could have got leasing.
Permalink Reply by jnm on November 12, 2010 at 6:08am
Does anyone know what distance setback is mandated in Ohio
Permalink Reply by Frank Walker on November 12, 2010 at 7:31am
Mike

The 330' setback exists in TX. For Marcellus drilling, there is no setback requirement in PA today. A driller can drill right up to the property line of unleased property in PA.

Exception:

My knowledge of this is certain, but not recent. If a new law has passed within the last two or three months relating to this, I would not know. But I don't believe the law has changed.

Stipulated:

To my knowledge, no driller has taken advantage of our weak PA law and drilled alongside a property line. Most drillers voluntarily observe a respectful setback. Frac outreach, however, is incredibly variable. I'm aware of very tight Marcellus shale where the frac only extended out fifty feet from the bore hole. In other instances a frac can reach out five hundred feet or even further.

Mike, as your may be aware, the famous Garza decision in TX allows fracking of unleased shale. However, once again, there is a 330 foot setback in TX law. This provides a measure of fairness since a Lessee should be entitled to frac all of the shale in Lessee's leasehold.

I did not suggest suit be brought against any drilling company. I suggested notice be provided in an unambiguous manner. Some day this matter will be dealt with here in PA, either by the courts as in TX, or by the PA legislature. At that point it would be good to have provided notice, lest the driller assert permission had been granted. I would also advise the OP, if he posts his land, to include on his signs reference to prohibition of subsurface trespass. The more notice there is in this matter, the better.

Mike one last thing. My entire knowledge of this relates to Marcellus "deep" drilling. I live in NEPA. I have no knowledge whatsoever of shallow drilling. But I am aware there is PA law which covers shallow drilling while excluding the Marcellus. If the laws for shallow drilling include a 330' setback I would not know. My thinking is along the lines of "mile down" laterals in the Marcellus. These I know can legally run right alongside a property line. However, I acknowledge it is possible the vertical "down" portion of the well must by law stand back 330 feet. But that does not matter. It's the horizontal bores that matter.
Permalink Reply by Mike Knapp on November 12, 2010 at 8:15am
Section 6: Drilling Permits (58 P.S. § 406)
Before drilling into, or deeper than, the Onondaga horizon, the operator must obtain a permit from DEP. Upon submission of the permit application, DEP shall grant the permit unless the well location conflicts with an existing spacing or pooling order. If a spacing or pooling order is not in place, the well must be located a minimum of 330 feet from the nearest outside boundary line of the leased property. Where the leased property is part of a “voluntary unit,” then the well must be located a minimum of 330 feet from the unit boundary without regard to individual property lines. Wells cannot be drilled or operated in violation of any spacing or pooling order.
Permalink Reply by Frank Walker on November 12, 2010 at 11:00am
Yes, OK Mike. I guess I had it backward as re: depth. I was thinking the 330 setback might apply to shallow wells, which is wrong. However, the Marcellus lies atop the Onondaga. So the 330 foot setback law does not apply to Marcellus wells, as I wrote earlier.

Presumably, OTOH, the 330 foot setback would apply for Utica drilling here in PA.

It is preposterous with all the Marcellus drilling in PA that there is no applicable setback law. But that's how it is. Here is what I think happened:

"Back in the day" when the law you cited was passed, the drillers did not want a setback limitation. Most wells back then were shallow wells, more shallow even than Marcellus wells. So the drillers chose the Onondaga, which they thought would be a "safe" horizon . . in order not to limit themselves. This has worked out for them.

Regardless and for the sake of the OP, I want to reiterate I'm unaware of any driller drilling a Marcellus well adjacent to a property line. Doing so gets them into the possibility of "frac tresspass" (a term provided me by one lawyer with whom I have spoken on this matter), which they prefer to avoid.

In the Garza case in TX, my best memory is that that situation came up in a more suburban region of the Barnett where properties were smaller and more closely spaced. Here in PA so much of the drilling is in rural regions. Drillers don't really have need or pressure to risk trespass, frac or otherwise.
Permalink Reply by jnm on November 12, 2010 at 10:00am
Most experts estimate fracking does not go much further than 250' beyond the wellbore.

If the fracking doesn't go out more than 250' from the wellbore; why are there so many non drill leases. 250 feet would get very far into most properties even if they came from all four sides.
Permalink Reply by Frank Walker on November 12, 2010 at 11:13am
NSD (non surface development) leases are often entered into by landowners who wish to preserve the residential use and/or quiet enjoyment of their property (for whatever purpose) by obviating the possibility of a well on the property. Land leased beneath an NSD lease can nevertheless be fully developed from a nearby (but off premises) well pad through use of horizontal drilling.

In this or any other situation, the spacing between laterals is determined by the driller based on their best estimate of the frac outreach in the particular shale being drilled. As I wrote earlier, frac outreach varies a great deal depending on local shale characteristics.

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