The House Judiciary Committee will hold a public hearing on the”co-tenancy” bill (HB 4268) this Friday, February 9 starting at 8:30AM in the House Chamber. Anyone who would like to travel to Charleston to speak out against the bill and share their concerns will have the opportunity to do so. However, considering the high level of interest in the bill and the limited amount of time, speakers will likely have only a minute or two to make their comments.
If you plan to make the trip:
Click here for a list of committee members with their phone number and email address, followed by a ‘list’ of emails for all members that can easily be copied and pasted into the ‘To’ field of your email.
For your convenience, here is our list of problems with HB 4268:
First, in order to drill a horizontal well the driller has to start on one surface tract, drill down to the mineral tract underlying that surface tract, and then drill horizontally a mile or more through many neighboring surface tracts. Under current law, if the driller while drilling horizontally for that mile or more runs into that mineral tract where the driller only has leases from, say, 90% of the mineral owners, the driller has to stop. If this bill passes the driller will be able to keep drilling even longer horizontal well bores through those neighboring mineral tracts. This means more time on the first surface owner’s land, more trucks, more noise, more light, more dust, and other air pollution to drill the longer horizontal.
As the bill is currently drafted the surface owner’s consent is not needed if they use the bill to drill through that neighboring mineral tract. The current bill only requires surface owner consent if the bill is used for the one mineral tract directly under the surface owner.
The bill should require the driller to get the surface owner’s consent if the bill is used to drill not only the mineral tract under the pad, but any mineral tract being accessed from the pad. If they use this statute to drill longer laterals to develop other mineral tracts they should be required to get your consent!
Second, the bill contains a loophole that would allow a driller with an existing surface use agreement or other valid contract that pre-dates horizontal drilling to be used to locate well pads for horizontal drilling on a surface owner’s land. Surface use agreements should be for development methods and technologies contemplated at the time of the agreement, not agreements that contemplated conventional drilling.
Last but not least, the bill requires that non-consenting cotenants be paid the highest royalty in leases signed by the consenting owners. This is an improvement over the earlier bill. A knowledgeable mineral owner still might be able to negotiate a better deal but if 75% of their out-of-state cousins sign bad leases with low bonuses, with low royalties, with clauses that allow disposal wells to be drilled on the property, or other bad provisions, then they are stuck with those terms. The bill lacks due process (right to appeal, etc.) for non-consenting owners. Those mineral owners who do not like their cousins’ leases should get a due process hearing before the existing Oil and Gas Conservation Commission to try to get better terms.