Are they following the rules and who's watching?

As a consultant and all-around oil and gas junkie, I have viewed 1000s of well documents over the past 20 years focusing mainly on the most recent shale development. Viewing old handwritten conventional well records is mostly for historical entertainment. Area of review summaries, location plats, well records or completion reports, directional drilling surveys, regulatory inactive permits, plugging reports, well logs, production reports, and inspection reports would be my main target and they all tell a story that can help the Lessor understand the development of their rights. What if they are not accurate or fail to follow the regulatory rules of reporting? Who is minding the henhouse? Let's think about what PA DEP oil and gas regulations require, how inaccuracies or omissions may affect you and what improvements might benefit you, a vital stakeholder in the production of US energy.

There is an unimaginable amount of paperwork filed regarding oil and gas development in Pennsylvania dating back to the 1800s. Just consider that at present there are 86,935 active oil and gas wells in PA. The February DEP unconventional production report shows 11,527 active shale wells of which 10,011 are producing. Conventional well production is reported yearly (after a 5-year confidential period) and the 2020 report shows 75,408 active wells and 64,664 of those are in production. Those non-producing wells also play into the reporting issues, that can be significant if your acreage is HBP or Held by Production. For now, let's just consider the "Shale" and that is a mountain of paperwork!

The oil and gas lease you signed will grant, among other things, the right to explore for and develop the resource. Development will in most cases include access roads, water impoundments, a well pad, pipeline, risers, compressors, staging areas, temporary workspaces, and more. In the case of shale, the surface area impacted has been reduced by pad drilling, super long laterals, and stacked play development. That's all positive so far. Now the challenge becomes keeping up with what is actually happening in the process. All those impacts will happen on someone's surface, they will receive a notice and if their lease requires it they will also have the right to be consulted on location and surface impacts (reserving the right to have input will be another post.) If you are lucky enough to escape any surface disturbance you are not entitled to any kind of notification unless your lease requires it and its safe to say that most leases do not. Clients often call to say they can see the drilling rig from their kitchen window so they must be in the "unit" and ask "How do I find out?" Of course, they can hire me www.gaswellguru.com to do the research and explain the results however, on wells drilled more recently you can find a great deal of information easily on https://www.dep.pa.gov. DEP has made great strides in improving access but issues preventing easy access are cropping up.

As a novice blogger, I need to figure out the formula for how long a blog should be and just realized I may already have reached the limit but, hold on I am not done yet. Now you are aware that there are reporting issues, far too many for one blog post so I will begin with Location Plats. Location plats are critical for the Lessor to determine where the planned wellbore will travel in relation to the boundaries of their oil and gas rights.

Who receives the Location Plat?

If the well pad is on your surface you will receive the Location Plat in the required notification process or the consultation process if dictated by your lease.
If your water well is within 2500' or 3000' to 4000'( if the operator so chooses) from the wellbore, water testing is required and a map will be provided that is sometimes mistaken as a Location Plat however it will not show the lateral path.
If you own only oil and gas rights and no surface you will not receive notice of the permit or drilling and will need to obtain a Location Plat from other sources.

What information is required on the Location Plat titled Page 3?

The Plat Instructions from DEP includes the following excerpt:-(see the link to full instructions below)
" Page 3 - Map View of Deviated or Horizontal Wellbore
- Show and label these features
  - Tract boundary with acreage
  - Public road that will be used to access the well site
  - Access road that will be constructed to the well pad
  - Top hole location with latitude and longitude
  - Bottom hole location with latitude and longitude
  - Kick off point with latitude and longitude if not directly under the surface wellbore.
  - Landing Point with latitude and longitude
  - Actual wellbore path
  - Course and distance to the well’s top hole location from two permanent identifiable points or land marks on the tract boundary corners
  - North arrow
  - Map scale
  - For Conservation Wells illustrate that the well meets the 330 feet setback requirements of the Conservation Law"
All documents, just like royalty checks, vary in format from operator to operator. Kudos to the operators that provide all the required information! Though it is complicated to read, you can ascertain how the wellbore will or will not impact your oil and gas rights. The location plat below, Marcucci Jones 12H, is easily accessible in PDF format and contains the information needed.

Where are the deficiencies?

The Castro ET AL Unit 13H Location Plat above, in my opinion, clearly does not provide the required information. It would not be possible to determine where the wellbore is in relation to the boundaries of the Lessor's oil and gas rights. Of course, you can "simply" plot the GIS coordinates on a plat map and figure it out, LOL!
The last point I will make is that increasingly, certain operators are filing documents in formats that are not easily accessible to the Lessor. Oil and gas professionals use sophisticated GIS, CAD, and other software to design drilling plans used in the permitting process. If they file the required documents in those formats it is not possible to view, download and utilize the information without additional software. It would appear that DEP intends this information to be available and user-friendly for the public which includes you the private mineral owner. All documents should be converted to a universally accepted PDF format.

We need to continually remind operators, regulators, and legislators of our importance as stakeholders in the oil and gas industry. We need to advocate for laws and regulations that protect our interests and hold everyone's feet to the fire. It is not surprising that in all the fury of the PA Shale rush some things will be overlooked but we need to take notice of deficiencies and work to have them corrected. Recently there were major changes made to how monthly unconventional well production was downloaded, I quickly realized that the change would make it impossible for landowners to download individual well production history. I contacted DEP as did other members of the Pennsylvania Oil and Gas Landowner Alliance (www.pogla.org) Board, this resulted in modifications that restored needed functions.

Lets' stay on our toes and work to get what we bargained for, our fair share!

Related resources:

Join the Pennsylvania Oil and Gas Landowner Alliance today! www.pogla.org

PA DEP- Oil and Gas Laws, Regulations and Guidelines https://www.dep.pa.gov/Business/Energy/OilandGasPrograms/OilandGasMgmt/Pages/Laws,-Regulations-and-Guidelines.aspx

The caller, Sally, said “So, you are the Guru?” (Laughter) An internet search led Sally to www.gaswellguru.com. Finally retired after 30 years with a local manufacturing company, she owns oil and gas rights beneath 40 acres with a home, garden, and some miscellaneous farm animals. Before the landman called last week, Sally had given zero consideration to "subsurface rights" but this guy was talking about "bonus" money, drilling rigs, and royalty payments. Suddenly thrust into a foreign world, she instinctively decided more information is needed before making any decisions. I think Sally came to the right place. No one bestowed the title on me, I am the self-proclaimed GasWellGuru.

It was 2000 when the first landman knocked on our farmhouse door, the offer was $2 per acre for a 20-year lease, the terms were atrocious. His daytime job was delivering packages in a brown uniform, he told my husband and me that my brother-in-law had already signed this very same lease on his farm, one quick phone call would confirm that was not true, in fact, I guess you would call it a lie. That began my journey, it would be four years before we leased the acreage that was our home and dairy farm since 1984. Just across the border in New York State (yes, I said New York State) oil and gas operators were drilling and completing natural gas wells into the Trenton-Black River formations. Leasing was competitive and the development results ranged from record-setting production to dry holes. The NY Farm Bureau, Cornell University, and a local attorney teamed up to provide a free seminar for landowners in Elmira at the old Southside High School. The take away for me was 1) everything in that 20-year lease was negotiable 2) just a few miles into NYS landowners were receiving not $2 per acre but $100, $200, and more per acre and 3) if neighbors were of a mind to work together, we could leverage a better deal.

The Shale potential that became a frenzy in 2008 turned me into an oil and gas junkie. Do you remember the wonky sound of a dial-up internet connection? How about initiating a search and then making out your Christmas cards while it loaded? Undaunted I began researching online, reading books, attending seminars, and eventually participating as a speaker in the Penn State natural gas education seminars. In 2008 I became a Certified Mineral Manager through the National Association of Royalty Owners (NARO) Foundation. What I possess is an array of knowledge about oil and gas drilling technology, lease negotiation, environmental impacts, and industry practices. Through a short twenty years of oil and gas development-related reading, research and networking I have become an information resource for Pennsylvania's private mineral owners. As President of R&R Energy Consulting I provide services to help landowners who own oil and gas rights, navigate the complicated business of natural gas development.

It was clear to me early on that landowners were at a disadvantage in dealing with a sophisticated oil and gas industry. Lessors would need to become educated about the industry and actively advocate for fair treatment. Since 2008 I have been dedicated to my work with non-profit organizations that further the cause of fair treatment for mineral owners. I was a NARO board member for ten years and filled the role of Interim Executive Director in 2018. In 2010 I was a founding member of the NARO PA Chapter and served as Present for eight years. In 2019 I was instrumental in establishing the new Pennsylvania Oil and gas Landowner Alliance (POGLA) to intensify our focus on state issues. Currently I manage the membership database and actively recruit new members to strengthen the position of all landowners with oil and gas rights in Pennsylvania.

No matter how serious the situation I always look for humor, when I created a website, the title was an attempt to keep it light and now I guess I am the Guru. When I began this journey twenty years ago shale was not in my vocabulary, the Trenton Black River activity in New York was incredibly interesting with potential in our area of Pennsylvania and something told me I needed to know more. Oil and gas development still excites me on every level so I continue to follow the technology, the legal issues, the legislative challenges, the environmental impacts, and all the combined effects on the private mineral owner. Who knows how this blogging thing will work out for me…? I am going to share my thoughts as a mineral owner, consultant, and someone who seeks the right path forward, I would be honored if you followed along!

Are they following the rules?