Certified letter

Just wondering if it is something new, when a well is proposed that a certified letter from Ohio department of natural resources tells you that you are in a unit and there will be a there hearing to see if the well is necessary. Driller of well has to show proof of findings and be able to cover cost. Date and time of hearing is given and question and answers will be taken. In the past I never received a letter from them for other wells just a division order after well is drilled. Is this a new common practice? Everyone in the unit received the letter, seems an enormous cost even the post office was surprised and glad.

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Permalink Reply by Joseph-Ohio on May 1, 2016 at 9:39pm

'............if the well is necessary.' ? ?

Would not that depend on the Land / Mineral Owner, Lessor, Developer / the Private Sector as opposed to some Government Buereau / Department ? ?

Where's the 'Free Market' principal in all of that ? ?

Reads like 'overreach' right out of the gate to me.

Reads like they (the ODNR) are writing as if they own the minerals (yet they haven't paid for them have they ? ?).

How about everyone else ? ?

Permalink Reply by Joseph-Ohio on May 1, 2016 at 10:57pm

Also wondering if the letter is kind of a somewhat incognito / veiled force pooling advisory ? ?

Are your lands leased ? ?

Considering all the facets (as many as I can anyway) of the Gas & Oil Well development goings on out there on the table these days - it's tough even trying to understand the whole picture of what's actually / could be happening - and especially so with so little info. to work with.

Permalink Reply by KAR on May 1, 2016 at 11:32pm
Sounds like it's for a unitization case (forced pooling).
Permalink Reply by Mark Y on May 2, 2016 at 12:57am

There are only 2 people not leased ,but they only own .223 of an acre. It states that this hearing is to approve unification. Applicant must satisfy 2 requirements. 1.The operation is necessary to increase substantially the recovery of oil and gas. 2.The value of the estimated additional recovery of oil and gas exceeds additional cost incident to conducting the operation.

Permalink Reply by Joseph-Ohio on May 2, 2016 at 1:12am

Thanks for clarifying that there is no incognito / veiled pretext to the letter.

It's right there in black and white and puts an understandable reason for the hearing.

Sounds like (at least from the applicant's point of view) that it would be necessary to substantially increase the recovery of oil and gas - hence the existence of the Application in the first place.

Can't fathom a reason the ODNR wouldn't approve it as it means income to the State's Treasury. 

Good luck and thanks again for sharing.

Permalink Reply by Bob Shaw on May 2, 2016 at 2:36am

I have not heard of that, but Wells must have Permit issued by the regulating agency. If there was some doubt by that agency that the Production Unit was for other than the purpose of actually producing product, vs revenue preservation for the leasee via "Held by Production", a public hearing might be just the thing. The purpose of a regulatory agency is not to 'rubber stamp' any application that comes in the mail, if things are working as they should.

Permalink Reply by Joseph-Ohio on May 2, 2016 at 3:31am

I'm on your bus with all of that Bob.

But, right now I'm thinking / guessing that the hearing is private and open only to those that the ODNR has invited (unless that's what you meant by 'public' ?).

Yeah, if all the developer wants to do is 'hold by production' it would be great if the ODNR would step-in with a 'no-no' ruling to protect the land / mineral owners / lessors from that brand of abuse.  I write that considering the land / mineral owners / lessors do not have an adequate 'Delay Rental' compensation clause.

Complicated isn't it ? ?

That's why I keep bringing up the implementation of a strata specific Ohio Standard land / mineral owner / lessor cognizant / protective leasehold / sales agreement - written to preclude abuses.

The way things seem to me to be right now, there's too many loopholes / workarounds / ways to take advantage of / abuse land / mineral owners / lessors regarding oil and gas well development.  Thinking all that needs to be cleaned up.

Permalink Reply by Mark Y on May 2, 2016 at 4:52am

Funny thing is they had just renewed all the leases for 5 years in December, so why the hold in production.

Permalink Reply by Joseph-Ohio on May 2, 2016 at 5:57am

World wide oil glut on the account of OPEC / SA etc.

Prices down.

The need to re-organize exists on our behalf the way I see it.

We have to only play ball with friendlies.

We're at war.

Let's not help the bad guys.

It ain't really all that funny the way I see it neighbor.

Good luck to all of us.

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