The Energy Committee met Tuesday to discuss two bills dealing with oil and gas leases and horizontal wells.
House Bill 2866 relates to the termination, expiration, or cancellation of oil or gas leases. The purpose of the bill is to require lessees to provide lessors with a recordable release for oil or natural gas leases, when the leases are expired, terminated, or cancelled under their terms.
The bill defines a procedure where lessors may attempt to document the invalidity of a lease in the public record, while also providing the operators an opportunity to dispute the invalidity before recordation.
There were several questions regarding to whom notice had to be provided and how the affidavit should be indexed in the county records. The committee amendment clarified that the lessor seeking the release should attempt notice on all of the lessees of record and any other lessees known to the lessor. The changes also require county clerks to record the affidavit under a larger group of names. The bill will be reported to the House after being referred to the Judiciary Committee.
House Bill 2834 updates and modernizes the minimum spacing provisions for the drilling of horizontal deep wells. In an effort to reduce the number of exceptions, this bill seeks to modify the powers and duties of the Oil and Gas Conservation Commission by imposing limitations under the commission’s duty to regulate horizontal deep wells. All other wells would be unaffected.
Under this bill, the commission may not impose spacing limitations of greater than 1,000 feet between horizontal deep wells operated by different operators or require a setback of more than 500 feet from a boundary that divides different operators.
Regarding spacing, a horizontal deep well is defined in the bill as only the estimated productive interval, being the perforated length of a horizontal section of the well bore in the target formation. The commission may not include the area of the well pad or vertical or angled portions of the well bore to calculate distances for horizontal deep wells, whether within or outside unit or lease boundaries.
This bill will also be reported to the House.
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