Forced Pooling

Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

WV Legislature Makes Another Run at Forced Pooling/Unitization
February 19, 2014February 19, 2014

Breaking news: The West Virginia Legislature is once again taking up the issue of forced pooling–or as they are calling it, “unitization”. The forced pooling bill was introduced once again, as it has been for several years running, just a few days ago. Each year the WV legislature meets for a 60-day session and that’s it. So work has to get done quickly. An alert MDN reader tipped us that later today the House of Delegates Energy Committee will consider H.B. 4558 (full copy of the bill embedded below) at a 3 pm session today. The committee must vote to report the bill out of committee before a vote by the entire House can be taken. Will that happen? Not sure.

According to the West Virginia Natural Gas Blog (written by law firm Lewis Glasser Casey & Rollins), both of WV’s natural gas associations are in favor of the bill. MDN has not had time to read/review the bill and therefore won’t (at this time) render an opinion. But our long-standing view remains unchanged–we take a dim view of forced pooling period. Unitization–the right to re-sell already-leased land, or to include small bits of land where the owner cannot be tracked down after a good-faith effort–is one thing. Coming in and saying 51% of your neighbors have signed, we’ll take yours too if you don’t–that’s a completely different matter and for us, should not be done. We’re sure there will be more press on today’s hearing, which we’ll bring you when we see it…
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Atlas Energy | Chesapeake Energy | Columbiana County | Energy Companies | Forced Pooling | Industrywide Issues | Ohio

Chesapeake, Atlas Try Forced Pooling in Columbiana County, OH
February 12, 2014February 12, 2014

Forced pooling, or as it’s called in Ohio, “unitization”–it’s something we understand, but we don’t like it. Chesapeake Energy and Atlas Noble have filed petitions seeking forced pooling for property owned by a number of landowners in Columbiana County, OH. Some of those petitions have been approved by the Ohio Dept. of Natural Resources (ODNR). Some are still pending.

The industry and landowners who have leased will argue it’s not fair that one or two hold-outs who won’t lease can scuttle a deal to drill and therefore should be forced to lease if they can’t come to reasonable terms. Landowners who don’t want to lease say it’s their land and drillers can figure out how to drill around them–I don’t say you can’t drill, and you don’t say I have to drill under my land. We favor the later position, to the consternation of our friends in the shale drilling industry. We say, make it worth their while–give them an offer they can’t refuse. Here’s some of the details on the forced pooling being sought by Chessy and Atlas in eastern OH:
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Forced Pooling | Industrywide Issues | Litigation | Ohio | Statewide OH | Utica Shale

Forced Pooling in Ohio Utica Shale on the Rise, Sadly
January 13, 2014January 13, 2014

Drillers in Ohio’s Utica Shale are increasingly using the state’s “unitization” or forced pooling laws to force landowners who don’t want drilling to be included in drilling units where a majority of the neighboring land is leased. According to an article in the Akron Beacon Journal, 22 such requests have been filed in Ohio to date. Of those 22 filed, 6 were approved, 6 were resolved or dropped, and 10 are pending.

We know the arguments for and against forced pooling, and you know where we stand on the issue (we take a dim view of it), so we won’t belabor the point. Here’s the Beacon Journal’s update on some of the forced pooling cases in eastern Ohio, including which drillers are doing the forcing, and the results…
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Energy Companies | Forced Pooling | Hilcorp Energy | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA | Utica Shale

Ironic: PA Enviro Court Forcing DEP to Rule on Forced Pooling
November 21, 2013November 21, 2013

A 51-year old forced pooling law in Pennsylvania that strangely does not apply to the Marcellus Shale layer, but does apply to the deeper Utica Shale layer, is being put to the test. In early October, MDN told you that Hilcorp had decided to take “the low road” and sue a landowner in Lawrence County, PA to force that landowner to allow his 14.6 acres to be drilled under using the old law (see Hilcorp Uses PA Forced Pooling Law Against Lawrence Cty Landowner).

The PA Dept. of Environmental Protection balked at invoking the old law to force the landowner and instead tossed this hot potato to the Environmental Hearing Board. The Hearing Board ruled this week that it doesn’t have jurisdiction and that the matter properly does belong back at the DEP. So what will the DEP do now?…
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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

Forced Pooling Talk at WV Legislative Interim Meeting
November 21, 2013November 21, 2013

Like a bad penny, the issue of forced pooling (or “unitization” or whatever you want to call it) keeps turning up in West Virginia. WV legislators are in the midst of holding an interim meeting, and this week they heard from both supporters and opponents of forced pooling.

The sharp lawyers from Lewis Glasser Casey & Rollins made this observation about the session where it was discussed:
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Energy Companies | Forced Pooling | Hilcorp Energy | Industrywide Issues | Lawrence County | Litigation | Pennsylvania

Hilcorp Uses PA Forced Pooling Law Against Lawrence Cty Landowner
October 8, 2013October 8, 2013

This is not the kind of story we enjoy sharing with you. Hilcorp, a major driller in the Utica and Marcellus Shale, has decided to take what we consider “the low road” and is using a 1961 Pennsylvania law to sue a landowner to allow them to drill under their property. It’s called “forced pooling,” “compulsory integration,” and a variety of other terms. MDN does not support it. Our argument is simple: My neighbor should not have the right to tell me I can’t drill on and under my land, and I should not have the right to force it on my neighbor if they don’t want it. We believe it’s the only defensible position in the drilling debate.

Regardless, Hilcorp has moved forward with a legal action against a landowner in Lawrence County, PA who owns just 14.6 acres in a drilling unit leased by Hilcorp–and that 14.6 acres apparently prevents Hilcorp from drilling. So off to court they go…
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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

WV Legislators Hear Presentation on Forced Pooling from SORO
September 25, 2013September 25, 2013

Forced pooling is once again being considered by West Virginia legislators. In the past few years forced pooling (which is sometimes called “lease pooling” or “lease integration” or any of several other terms) has been a non-starter in WV. Each time it comes up for consideration it goes nowhere–no votes, no nothing. So when a committee of WV legislators ask for a briefing on the topic–it’s noteworthy. It’s also very likely to come up again in the 2014 general session…
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Forced Pooling | Industrywide Issues | Pennsylvania | Statewide PA

Courageous PA State Rep Tackles Shameful Forced Pooling Law
August 14, 2013August 14, 2013

Finally, a PA state representative with ~~balls~~ intestinal fortitude: Rep. Michele Brooks (Republican from Greenville, 17th District). MDN previously told you about bone-headed legislation (SB259) signed into law last month by PA Gov. Tom Corbett (see PA Gov Corbett Signs Back-Door Forced Pooling Bill into Law). No matter how you try to pretty it up, and no matter what redeeming qualities the legislation has for landowners who need more royalty calculation transparency–at the last minute a provision was slipped in to the law providing for forced pooling for some landowners with old leases. It’s a bad law for PA landowners. Already EQT has used the law against landowners in the Pittsburgh area (see Bad News: EQT Sues 70 Landowners Using New PA Forced Pooling Law).

PA Rep. Michele Brooks has had the courage to step forward to offer a new bill repealing the forced pooling provision in SB259. She’s currently looking for some of her fellow Republicans (and perhaps a few pro-drilling Dems) to stand up and be counted with her. Who will match her courage?
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Allegheny County | Energy Companies | EQT Corp | Forced Pooling | Industrywide Issues | Litigation | Pennsylvania | Statewide PA

Bad News: EQT Sues 70 Landowners Using New PA Forced Pooling Law
August 1, 2013

The recently signed Pennsylvania Royalty Bill SB259 provides extra transparency for landowners in how royalties are calculated, but it also introduces forced pooling for some landowners with old, pre-Marcellus leases (see PA Gov Corbett Signs Back-Door Forced Pooling Bill into Law). As MDN and landowner groups like the National Association of Royalty Owners (NARO) feared, this legislation is now being used against landowners. Earlier this week, EQT Corp. used the new law to sue 70 landowners to force them to allow EQT to get on their land to conduct survey work for future drilling on or under the land. Bye bye negotiations. Bye bye fairness. Hello steamroller.

This lawsuit is bad news for PA landowners and bad news for pro-drilling Gov. Tom Corbett who mouthed platitudes that this type of thing would not happen when he signed it into law…
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Anti-Drilling/Fossil Fuel | Beaver County | Forced Pooling | Industrywide Issues | Pennsylvania | Washington County

The Nerve: PA Rep White Lectures Gov Corbett on Forced Pooling
July 24, 2013July 24, 2013

Inexplicably, PA Rep. Jesse White is still in office. He hasn’t resigned over his shameful and unethical activity of anonymously attacking his own pro-drilling constituents with fake online identities–in fact sometimes pretending to be the very people he was attacking (see How the Mighty Have Fallen: PA Rep White Admits Guilt, Not Sorry). He admitted his guilt, yet he still has not either resigned nor has he been removed from office by his colleagues. It’s an ongoing shame.

Not only has White not left office, he’s now “back” with a new op-ed article (this one bravely written under his own name) criticizing PA Gov. Tom Corbett on the issue of forced pooling. Sorry Rep. White, your actions speak so loudly, we can’t hear anything you say with your words anymore…
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Forced Pooling | Industrywide Issues | Pennsylvania | Statewide PA

PA Gov Corbett Signs Back-Door Forced Pooling Bill into Law
July 11, 2013July 11, 2013

It’s sad for us to have to report this, but PA Gov. Tom Corbett has signed a bill into law that’s bad for PA’s landowners. MDN told you about Senate Bill SB259 last week (see New PA Royalty Bill SB259 Faces Opposition from NARO). While the bill has some very good things for landowners in it (more transparency with items deducted from royalty checks), there’s one last minute addition that’s a big problem: There’s language that allows landowners with older leases to be pooled with others, putting them at a disadvantage–they can’t renegotiate their lease for a better deal.

It’s a bad deal for landowners. No matter how much lipstick you put on this pig (see Corbett’s statement below), it’s still a pig…
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Forced Pooling | Industrywide Issues | Ohio | Statewide OH

ODNR Issues Guidelines for Unitization (Forced Pooling) Requests
June 18, 2013June 18, 2013

If you’re a driller in Ohio with leased Utica Shale land, but there’s a holdout or two in some of your leaseholds, you can make an application with the Ohio Dept. of Natural Resources’ (ODNR) Division of Oil & Gas for something called “unitization.” MDN calls it “forced pooling,” a term more commonly used. It means (in Ohio) that if you own leases for 65% of the land in a given unit (typically 640 acres) and want to drill on and under that land, you can file an application to request a unitization hearing. We’ve embedded the guidelines you need to follow in your application below.

But be forewarned: There’s a lot of hoops to jump through. The application you file must be complete, including things like a gamma ray-density log, lots of aerial photographs and maps, complete information on all mineral rights owners, and a check for $10,000. Don’t forget the check. And you’d better be sure your ducks are all in a row, because the check is non-refundable…
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Forced Pooling | Industrywide Issues | Ohio | Statewide OH

Ohio Force Pooling Requests: 4 Granted, 5 Pending, 2 Other
April 29, 2013April 29, 2013

An extensive article on “unitization” (what MDN calls “forced pooling”) in Ohio appeared in the Sunday Youngstown Vindicator. The article gives a good overview of the history of unitization in Ohio, along with current requests pending with the ODNR.

The article begins this way:

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BP | Energy Companies | Forced Pooling | Industrywide Issues | Ohio | Trumbull County

ODNR Awards 2 New Forced Pooling Orders in OH – to BP
April 23, 2013April 23, 2013

The Ohio Dept. of Natural Resources (ODNR) recently issued two new “unitization” (or forced pooling) orders, bringing the total number of unitizations to four that they’ve issued in the Utica Shale. Both of the new orders were issued on behalf of BP and both were in Trumbull County. Here’s the details of the two orders, including how much the reluctant landowners were awarded as a bonus and how much they’ll make in royalties:

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Forced Pooling | Industrywide Issues | Regulation | Statewide WV | West Virginia

WV “Forced Pooling with a Twist” Dies in Senate for 2013
April 9, 2013April 9, 2013

Less than two weeks ago, MDN reported that "forced pooling" in very limited circumstances may soon be approved in West Virginia, in cases where the mineral rights owner for land adjacent to already-leased land either can’t be determined or can’t be found (see WV Legislation Would Create Forced Pooling – with a Twist). MDN thought the proposal was a common sense approach to solve an existing problem. However, the WV Senate apparently did not agree.

Senate Bill 616 never even made it to committee for consideration. It’s now a dead issue for this session of the legislature, which is nearing the end of its 60-day term for this year:

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Forced Pooling | Industrywide Issues | Statewide WV | West Virginia

WV Legislation Would Create Forced Pooling – with a Twist
March 28, 2013March 28, 2013

A bill just introduced into the West Virginia legislature would allow for “forced pooling” in very specific cases. Forced pooling laws, in case you’re unfamiliar with the term, require or “force” landowners who have not signed a lease to allow drilling because their neighbors have all signed a lease and drilling under the holdout’s property is required in order to access the other leased properties. However, the WV bill adds a big twist: It will allow forced pooling only in cases where the owner of the mineral rights can’t be determined, or the owner can be determined but can’t be found.

Supporters of the bill, introduced by Sen. Brooks McCabe (D-Kanawha), are careful to point out the new bill (unlike previous failed forced pooling bills) does not force known, unwilling landowners to be placed into a “unit” for drilling…

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