In a huge victory for surface owners and WVSORO, the West Virginia Supreme Court has ruled that in virtually every instance the driller has to get the written consent and agreement of the surface owner before the driller can put in a well pad for horizontal wells on the surface owner — or the surface owner can just say no!
Do you own the coal under your land?
If you only own the surface of your land and none of the minerals, this strategy will not work for you. Skip to this next heading, which is also pretty good. But if you own the surface and the minerals, and in particular any of the coal, then owning the coal will work for you to block them from using your land for a well pad that will contains several horizontal wells.
Most horizontal wells are drilled in groups from centralized well pads these days – with four, six or even more horizontal wells being drilled from one centralized pad/ well site. Coal owners can make them drill their wells 1500 feet apart. So if you own the coal, you can block the use of your surface to drill multiple wells on one pad because they are not 1500 feet apart. That law was not intended to work in this circumstance, but since the legislature has no passed laws to protect us from the problems with horizontal drilling to the Marcellus Shale, we use what law we have available! Here is more about how to do that!
Whether you own the coal or not, the strategy under the next heading also works for you.
Is the proposed horizontal or conventional well in a floodplain?
The driller should be getting a floodplain permit under a County, and the ordinance may restrict what they can do in a flood plain. The ordinance should require that you get notice of the driller’s application for a floodplain ordinance, but probably does not. We have a separate web page about all of this.
WV-SORO believes that a surface owner who does not own his or her minerals cannot be forced to have a horizontal well pad on the surface land unless the horizontal well will only be draining the mineral tract under the surface owner’s land. This is good news for surface owners and we know lawyers who work for the industry who agree with this (although the companies and local landman may not realize it yet). Although there are no cases on this in West Virginia, legal encyclopedia’s of gas law say that this is “clearly” true and that the reason that there are no appellate court cases on the point is that “such veto powers appears generally assumed.
A Circuit Court judge agrees with WVSORO that a driller cannot use a surface owner’s land to drill wells horizontally into mineral tracts that do not underlie the surface owner’s land!
A decision by Judge Sweeney in Doddridge County that is in the same judicial circuit as Ritchie and Tyler Counties is very good for surface owners! The decision agrees with what we think is the law as decided by our Supreme Court in cases dealing with coal, and as general oil and gas law is summarized in treatises on oil and gas law. This is still not a West Virginia Supreme Court decision on gas, so Judge Sweeney’s decision is not binding on judges in other counties. However, it is almost certainly the way the same judge, the only judge in that circuit, will rule on other cases in those counties. In addition judges in other judicial circuits may well be influenced by it. So you are now more likely to win a case to block a wellpad on your land, and it certainly strengthens your bargaining position if you want to negotiate with the driller. This is as good as it gets until the West Virginia Supreme Court makes a decision on this issue that would be binding on all Circuit Court judges. Contact us if you have further questions about this case and how it can help you.
If your minerals were severed/leased long ago, and if you did not give them permission to use your surface for horizontal drilling, there is no implied right pool the underlying lease with another one and so no right to use your surface to do so. Click here for more information.
UPDATE #3:The 2018 Cotenancy statute requires the driller to get the surface owner’s consent/agreement before the driller can use the surface owner’s land to drill into mineral tracts for which the 2018 Cotenancy statute was used! We believe that the statute says this whether the mineral tract for which the driller used the cotenancy statute is the mineral tract under the surface tract where the well pad is located, or whether it is a neighboring mineral tract into which a horizontal well bore will be drilled. This is an important new tool surface owners can use to protect themselves. Click here for more information.
WV-SORO generally favors horizontal drilling because one well site, access road and pipeline replaces three or four. Moreover, if horizontal wells are drilled from centralized well pads, one well site, access road and pipeline can replace more than 20 vertical well sites etc. However, this does not mean the rights of the surface owner of the land where the wells are being drilled should be ignored or that the surface owner should not share in the financial benefits of producing the gas.
The key is knowing the boundaries of the tract of land on the date the ownership of the surface was severed from the ownership of minerals. Any of the surface land or tracts within the boundaries of the mineral tract at the time ownership was severed can be accessed to get to and develop those minerals. But the surface of the land cannot be used to get the minerals from a neighboring mineral tract. If a driller wants to drill a horizontal leg that goes beyond the boundaries of the tract at the time of the severance, then the driller has to have the permission of the surface owner to use the surface for drilling under that neighboring tract. If the driller does not get that permission, the driller has to stay inside the original boundaries.
Drillers prefer that centralized well pads be large enough to accommodate 6 or more horizontal wells, or enough to drain 640 or more acres. They can and will drill on smaller drainages, but it is less efficient and profitable. In the West Virginia counties where the Marcellus and other shales are being drilled horizontally, most tracts of land, even the original tracts at the time of severance, are smaller than 640 acres.
This is good news for surface owners because it means you can just say “no” to a horizontal well that goes beyond the original boundaries. This may force the driller to drill fewer and/or shorter horizontal legs, which will make the driller’s plan less profitable. However, this probably will not reduce the damage to the surface by much if the driller decides to drill from that location. But it may be discouraging enough that the driller will go elsewhere. Or it may give you a bargaining advantage to get more money for allowing them to use your surface to get to minerals in neighboring tracts. Although we have not heard from any surface owners who in the end thought they got enough money to adequately compensate them for what happened to their land and lives when any well site, let alone a centralized pad for multiple horizontal wells, was placed on them.. However, if you know of or are one, please let us know so we can help other surface owners who are looking for guidance determine how much money they should ask for.
[NOTE: This may not apply if you own the surface and the minerals. If you or a previous owner signed a lease that is still in effect which says that your land can be used to produce oil and gas from neighboring lands, then the driller may still be able to use your surface to get to neighboring minerals by drilling horizontally, but ONLY IF it says so in the lease. The lease may allow pipelines from neighboring tracts to cross your land, for example, but may not permit other uses. It is important to get the lease and read it carefully, or better yet, have a lawyer review it for you.]
Finally, there is one other argument that may keep a driller from using your surface for a horizontal well or maybe even a vertical Marcellus Shale well. Because the slick water fracturing and other techniques use in developing the Marcellus Shale require huge sites and impoundments, it’s possible that if you sued to stop them from placing such a site on your land, the courts would say that this type of well site was not “in the contemplation of the parties” at the time of the severance or the signing of the lease. (Read about this in the WV Surface Owners’ Guide to Oil and Gas and the updates to the Guide.) The problem with using this theory to stop the driller is that the surface owner would have to bring a suit in Circuit Court. (We hope someone does. We would consult with their lawyer if they do, and maybe file an amicus brief, etc.) On the other hand, the fact that the driller needs the surface owner’s consent in the first place before they can drill a horizontal well to get to minerals that were not within the boundary of the original tract places the surface owner in a much more advantageous position. If the driller is caught doing this without the surface owner’s permission, then a huge lawsuit is possible. The people financing the drilling know this. So basically, the driller has to get your consent BEFORE doing this and you can say, “No,” or at least get compensation that is more realistic.
Although we think the law favors surface owner, driller’s are disputing that in court. If you are committed to keeping horizontal drillers off your property, we think the best strategy, once you know they are coming, is to send them a certified letter stating which of the theories above applies to your situation, telling them that you will block them from coming on to your land, and inviting them to sue you in court to prove their case if they think your are wrong.
All the reasoning and legal research and strategizing leading us to this conclusion is too long and complicated for this web site, and not something we want the drillers to know. But in our experience, this is the only way to have an impact on them. However, we HIGHLY recommend that you should not undertake this strategy until you have contacted a lawyer to make sure you are right about your situation and to understand the risks. Like horizontal drilling itself, this is a new kind of legal problem. Very few lawyers will understand the dynamics and legal issues off the top of their heads. So WVSORO is happy to have your lawyer call our lawyers for a free consultation with whatever lawyer you choose to contact.