Did I Miss Something? What Happened in the Energy Sector in the Rockies Around the Holidays
Returning to work after the holiday season may have left many of you wondering if you missed anything important while you were in a cookie-induced holiday slumber.
Here is a short summary of some key items that happened in the energy sector in the Rocky Mountain region around the holidays to keep you in the loop:
Wyoming Amended APD Rules
Effective December 20, 2019, the Application for Permit to Drill (“APD”) rules have been amended for the State of Wyoming. The revisions to the APD rules can be found here.
It is no secret that the number of challenges to oil and gas operatorship has increased recently in Wyoming and that those challenges frequently result in a costly and time-consuming process that ultimately ends up delaying development.
Wyoming’s APD rules were amended in response to the increased volume of drilling permits filed in the Cowboy State and are an effort by the Wyoming Oil and Gas Conservation Commission (“WOGCC”) to reduce not only the backlog of permits but costly battles for operatorship.
Here is a quick summary of what you need to know about the new APD Rules – for more detail, check out the rules here:
Wyoming remains a “first-to-file” state when determining operatorship – the race is still on.
BUT there are now time limits (2-year anniversary of the most recent spud well in the DSU) and the opportunity/procedure for a challenging operator to seek operatorship.
The new WOGCC Rules – Chapter 3, Section 8, are worth a read for the details; specifically, subsections 8(l) and 8(m), the latter of which articulates the process that a challenging operator will utilize, within the two-year window. The Notice of Intent to File an 8(m) Application and the 8(m) Hearing Application under Section 8(m) are going to be the new meat and potatoes. Note that there are ten (10) criteria for the 8(m) Application that must be included when challenging operatorship and these criteria are contained in Section 8(m)(i).
TAKEAWAY: The takeaway is truly that Wyoming’s rule changes are an effort to articulate not only a clear and streamlined operatorship process in Wyoming, but a procedure for challenges to operatorship as well. Here’s hoping the changes will address the operatorship issues.
Colorado Provides Draft Wellbore Integrity Rules
On New Year’s Eve, the Colorado Oil and Gas Conservation Commission (“COGCC”) made the draft wellbore integrity rules available. The draft wellbore integrity rulemaking was shared on the COGCC website on December 31, 2019, via Google Drive, which can be accessed here or directly from the COGCC website here. The revisions to the draft form are provided in clean and also redline form to easily see the new changes, which are far too numerous to describe. The revisions include new definitions, changes in bradenhead testing, isolation of coal seams and protected water, and changes to the requirements for the well location plat, casing and cement plan and requirements for stimulation at depths of 2,000 feet or less provided with a Form 2 A – Application for Permit to Drill, just to name a few.
TAKEAWAY: The draft wellbore integrity rules were made public at a time when many of us may have missed it, yet they contain significant revisions to the rules. The deadline to submit a Request for Party Status in connection with the wellbore integrity rulemaking is Monday, January 13, 2020.
North Dakota Rule Changes in Process
The North Dakota Industrial Commission (“NDIC”) has been in the process of adopting changes to the oil and gas rules in the state since last spring/summer. The amended rules were approved by the NDIC on or about November 25, 2019, and can be found here. On December 20, 2019, the final rules were submitted to the Attorney General for a legal opinion on the same, which will be provided on or about January 24, 2020, according to the Timetable for Adopting Oil and Gas Rules.
TAKEAWAY: The North Dakota rule changes are in process and will be effective April 1, 2020, reportedly after the Attorney General confirms their legality and after approval of the Administrative Rules Committee.