Oil and Gas

The Need to Read the Entire Deed

The West Virginia Supreme Court of Appeals recently addressed a mineral conveyance issue in Tunnelton Cooperative Coal Co. v. Belmont Resources, LLC.  The case involved the interpretation of language from a 1901 mineral severance deed.  The grantors owned one-third of the coal and 100% of all other minerals underlying the tracts.  The deed specifically granted the “all the coal and other minerals” underlying the tracts.  A clause in the deed, however, stated that the parties understood that the grantors only intend to convey “one-third of all coal and other minerals” underlying the tracts and included a recitation of acreage that was exactly one-third of the total acreage.  At issue was whether the grantors intended to convey one-third or 100% of all the other minerals, thereby excepting and reserving for themselves the remaining two-thirds.

The Court concluded that the language in question did not clearly contain any exception or reservation of any mineral interest. In order to create an exception or reservation which would reduce a grant in the conveyance clause that was clear, correct and conventional, the reservation must be expressed in certain and definite language.  The Court concluded that the grantors intended to convey one-third of the coal and 100% of the other mineral interests. In divining the parties’ intent, the Court also considered the fact that there was no record of a tax assessment of any coal or other minerals in the grantors’ names after the conveyance.

To view a full copy of the case click here.

Pennsylvania DEP Issues Revised Erosion and Sediment Control General Permit – Accepting Comments

In response to a settlement reached nearly two years ago between the Pennsylvania DEP and the Chesapeake Bay Foundation, Talisman Energy USA Inc., and Ultra Resources Inc., the DEP issued a revised version of its erosion and sediment control general permit for earth disturbance associated with oil and gas activities.  The DEP also issued supporting documents, including a draft permit application and policy explaining the permit requirements.

Some of the changes that will affect the permitting process and the industry include:

• Mandated protection of waterways and watersheds from sediment runoff during construction which disturbs more than five (5) acres over the life of an oil or gas project.
• Agency authority to revoke an applicant’s request for expedited permit review if the applicant routinely submits applications under the general permit that contain administrative and technical problems.
• No expedited review of applications for projects that (1) may discharge sediment and runoff to exceptional-value or high-quality watersheds, (2) have well pads that lie within the floodplains, would be located on contaminated lands.
• Expedited review process for complete and accurate applications will be decided within 14 days from submission.  Otherwise, the review will be completed within 60 days and the agency has the right to hold an application if it has administrative and technical problems.
• The draft policy provides operators with guidance for their obligation to implement best management practices for erosion and sediment control to restore and stabilize a well site within nine (9) months of completing a well.
• Upon submission of notice of intent to construct, operators must demonstrate that their post-construction stormwater management plans are consistent with county stormwater management requirements.

The DEP is accepting comments on the draft permit application and supporting documents until March 21, 2012.  To view the draft permit and related documents clink on the following link.

 http://www.elibrary.dep.state.pa.us/dsweb/View/Collection-10904

Unanimously Passed Drilling Emergency Response Bill to be Signed by PA Governor

Although a comprehensive Pennsylvania Marcellus Shale bill is still heavily under negotiations, Governor Tom Corbitt is set to sign legislation that was unanimously passed by the Senate this week.  The legislation is designed to provide an emergency response plan and accurate GPS coordinates for each Marcellus Shale well site in Pennsylvania.  The measure introduced by Sen. Lisa Baker, a Luzerne County Republican, requires drillers to inform state and local officials of well pad locations and access roads.  They also must submit an emergency response plan to those officials, and post a reflective sign at the entrance to each well site with the address, GPS coordinates, the operator's emergency contact number and anything else state regulators decide to require.  The provisions of this law are to become effective immediately upon the Governor’s signature.  To view a full copy of the bill, click here.

http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2011&sessInd=0&billBody=S&billTyp=B&billNbr=0995&pn=1844

WV Office of Oil and Gas Industry Workshop Wants to Know if You’re Interested

The West Virginia Office of Oil and Gas (OOG) is planning an industry workshop to address the recently passed legislation, 22-6A (Natural Gas Horizontal Well Control Act) and would like to know if you would be interested in attending.  The primary focus of this workshop would be related to permitting/approval of activity covered under the article.  Consequently, the audience would likely need to be those that get into the details of putting such information together for submittal (which may include contractors, consultants, etc.). 

The workshop is intended to be conducted in Charleston, West Virginia, around the beginning of February.  If you would be interested in attending, we would be happy to collect and forward this information to the OOG and to keep you informed.  You can let us know by sending your response to srucker@jacksonkelly.comor, if you have an interest or questions and want to respond directly to OOG, you may contact Chief James A. Martin at james.a.martin@wv.gov.  A more specific invitation will be provided at a later date to give you more information.  This is simply a call for interest.

Presentation On West Virginia Natural Gas Horizontal Well Control Act

On Tuesday, December 20, 2011, members of the Jackson Kelly PLLC Oil and Gas Industry Group conducted a briefing conference call to provide a substantive overview of the 105-page H.B. 401 that was passed by the WV Legislature to govern horizontal well operations. The new law became effective on December 14, 2011. If you missed it, we have attached a copy of the slides used during the presentation. Or, you may click here for a link to the PowerPoint presentation or click here to view it as a PDF file. You may save, print and use the slide presentation in either format.  The presentation contains information you and others at your company can use to learn about the content of this important legislation. 

Marcellus Legislation Approved

The West Virginia Legislature passed legislation regulating Marcellus shale in West Virginia.  As reported on Monday, the bill proposed by Governor Earl Ray Tomblin during the special session this week, referred to as the Natural Gas Horizontal Well Control Act, requires higher permit fees, adds buffer zone provisions and more regulatory oversight of horizontal gas drilling and production activities in West Virginia.  The House of Delegates made several amendments to the bill Tuesday prior to its passage.  The bill will now be sent to Governor Tomblin for his signature.  The amendments to the Governor’s bill include the following:

• Requiring the West Virginia DEP to submit a report to the Legislature on the number of waivers granted regarding casing and cement standards and programs; 
   
• Requiring the West Virginia DEP to propose emergency and legislative rules pertaining to drilling in karst formations; 
   
• Requiring newspaper publication of a notice of permit applications and providing an opportunity for the public to submit written comments; 
   
• Requiring DEP to prepare a report to the Legislature on noise, light, dust and volatile organic compounds and their relationship to well location restrictions for occupied dwellings; 
   
• Allowing DEP to propose guidelines and procedures for controlling and mitigating levels of noise, light, dust and volatile organic compounds in relation to horizontal drilling activities; 
   
• Exempting certain wells from the Natural Gas Horizontal Well Control Act; and 
   
• Establishing criminal penalties and offenses for certain activities. 

Click below to read the entire bill as amended.
http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=hb401%20eng.htm&yr=2011&sesstype=4X&i=401

Governor Tomblin calls special session of the West Virginia Legislature regarding legislation on development of shale gas.

Governor Tomblin called a Special Session of the West Virginia Legislature beginning on December 11, 2011, to consider legislation regarding development of shale gas formations using horizontal wells and hydraulic fracturing techniques.  

Special Session for West Virginia Legislature

Governor Earl Ray Tomblin reportedly will call the legislature into special session beginning Sunday evening at 5 p.m. to deal with policies on the development of Marcellus shale in West Virginia.  A special legislative committee has been working on and approved a bill last month addressing Marcellus shale development. The bill includes increases in permit drilling fees, requirements for casing for the drilling area, and rules regarding proximity of drilling sites to residences.  Reportedly, representatives of the Tomblin administration met with stakeholders this week in an effort to reach a compromise on the legislation.  It is anticipated that Governor Tomblin's bill will include several proposed changes to the committee's bill.  Governor Tomblin announced yesterday that he would probably call the legislature into special session next week to deal with Marcellus shale policy during the 25^th Annual Project BEST breakfast at Oglebay Park’s Wilson Lodge.  We will update with details of the Governor’s bill as soon as it is made available.

Jackson Kelly expands Evansville, Indiana, office; Land and Natural Resource Development Practice Group

Kevin M. Halter recently joined Jackson Kelly PLLC as an associate in the firm’s newest office in Evansville, Indiana, as a result of continued client growth in the region. He will practice with the Land and Natural Resource Development Practice Group and focus on civil litigation, oil and gas law and commercial real estate transactions.

Halter joins the Evansville office just over a month after the firm announced the addition of Matthew Latowski in Evansville.  Latowski is routinely involved in examining titles and issuing acquisition, pre-drill and/or division order title opinions for coal and oil and gas clients.

Jackson Kelly opened its eleventh office in Evansville in early summer of this year to serve its growing energy practice. In addition to Halter and Latowski, the office is staffed by attorneys William C. Illingworth, Brandon S. Renner and Chad J. Sullivan. 

West Virginia Legislature Joint Select Committee on Marcellus Shale Adds Final Amendments and Approves Bill, Seeks Special Session

The West Virginia Legislature’s Joint Select Committee on Marcellus Shale recently added final amendments and approved a bill regarding regulations to Marcellus drilling activities, and asked Governor Earl Ray Tomblin to call a special session of the Legislature to take up the measure immediately.  Previous attempts to pass legislation regulating Marcellus Shale drilling have been unsuccessful, and advocates from both industry and environmental groups remain concerned over the scope of the bill.