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New Railroad Commission of Texas Rules re 10-Year Inactive Wells

In 2009, the Texas Legislature enacted House Bill 2259, establishing new requirements for oil and gas operators related to surface equipment removal and inactive wells. The Railroad Commission of Texas (“RRC”) has adopted amendments to existing Statewide Rules 1, 14, 21 and 78 to add the new statutory requirements, and to add the surface equipment removal and inactive well requirements set out by HB 2259 as new Statewide Rule 15 (with certain requirements [relating to surface casing] of the previous Rule 15 moving into Rule 14). Under the new Rules (adopted by the RRC on August 24, 2010 to be effective September 13th following September 10th publication in the Texas Register), all operators are required annually to address their complete inventory of inactive wells to obtain approval of their annual organization report. A detailed summary of the RRC’s new rules relating to inactive wells, and related information (including the RRC’s latest listing of “10 Year Inactive Wells”) can be found at the RRC’s website.

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The energy industry by its nature is complex, and so are its legal matters. Businesses that explore, develop, produce, store, market, transport and process energy resources are among the most capital intensive in the world. Energy industry transactions – from business combinations to raising capital – are high stakes and high impact.

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