Tuesday, April 15, 2014

West Virginia's Utica Shale Resource -- The Next Boom?

Two articles have been published recently that highlight growing interest in the Utica shale formation in West Virginia. Typically, northern and northcentral West Virginia have been attractive because of the prolific Marcellus formation.  Now, drillers are moving quickly to develop the state's lower Utica shale resources:
Utica Shale Rush Comes to W.Va.
The Wheeling Intelligencer, April 13, 2014
http://www.theintelligencer.net/page/content.detail/id/598764/Utica-Shale-Rush-Comes-to-W-Va-.html?nav=515

Utica's Next Frontier Moving To West Virginia, Pennsylvania
NGI Shale Daily, March 26, 2014
http://www.naturalgasintel.com/articles/97844-uticas-next-frontier-moving-to-west-virginia-pennsylvania

Monday, April 14, 2014

ODNR Announces New Permit Conditions For Drilling Near Known Faults or Seismic Activity


On April 11, 2014, the Ohio Department of Natural Resources announced that “New permits issued by ODNR for horizontal drilling within 3 miles of a known fault or area of seismic activity greater than a 2.0 magnitude would require companies to install sensitive seismic monitors.  If those monitors detect a seismic event in excess of 1.0 magnitude, activities would pause while the cause is investigated.  If the investigation reveals a probable connection to the hydraulic fracturing process, all well completion operations will be suspended.”  ODNR also announced that it will develop new criteria and permit conditions for new applications in light of this change in policy and will review previously issued permits that have not been drilled.  ODNR’s new permit conditions are likely in response to recent seismic events in areas of hydraulic fracturing. 

Here is a link to ODNR’s announcement:
http://oilandgas.ohiodnr.gov/oil-gas-home/post/ohio-announces-tougher-permit-conditions-for-drilling-activities-near-faults-and-areas-of-seismic-activity

For more information on these matters, please contact Paul Garinger at pgaringer@lgcr.com.

Ohio Appellate Court Affirms Automatic Vesting of Severed Mineral Interests Under Ohio’s 1989 Dormant Minerals Act

The Ohio 7th District Court of Appeals, in Walker v. Noon, held on April 3, 2014, that severed mineral interests automatically revert back to the surface owner under the 1989 Dormant Mineral Act. The Ohio Appellate Court held that the 1989 version of the Dormant Mineral Act automatically vested a surface owner with a severed mineral interest where no savings events occurred within the statute’s look-back period.  The Appellate Court further held that the notice requirements of the 2006 amendment to the Act do not apply retroactively.  The Appellate Court also reaffirmed that a severed mineral interest was not the subject of a title transaction that only conveyed the surface with a restatement of a prior mineral reservation.   This 7th District Decision adds further clarity to the Dormant Mineral Act issues that continue to arise in Ohio’s trial courts.

To learn more, please contact Paul Garinger at pgaringer@lgcr.com.

Friday, April 11, 2014

OHIO EPA Adopts New Air Pollution Rules For Horizontal Wells

On April 4, 2014 the Ohio EPA issued new emission rules (click to see) for horizontal oil and gas well sites.  The new rules are aimed at what the EPA calls “fugitive emissions” from leaking valves or connectors in drilling equipment.  The EPA’s stated goal is to stop emissions that can become smog and methane.   Companies are now required to scan well-site equipment quarterly using a device that can detect potential pollutants.  Any discovered leaks must be fixed within five days and repair reports submitted to state regulators.  The new EPA rules only apply to horizontal wells, which studies show may emit up to twice the methane of traditional vertical wells.  Ohio is the third state to adopt stricter fugitive emissions rules over the last six months, following Wyoming and Colorado.

For more information, please contact Paul Garinger at pgaringer@lgcr.com.