Tuesday, April 23, 2013

2 More Ohio Landowners Find Themselves Forced into Drilling Units

...with your land
From Oil & Gas Law Report:
The Ohio Department of Natural Resources (ODNR) recently issued two more unitization orders pursuant to R.C. 1509.28. These two orders bring the total number to four since the beginning of the Utica Shale play.
As we discussed after the last order was released, this statute is becoming a valuable tool for operators as they cobble together the rights to drill horizontal production wells. In the early stages of the Utica shale play, each new unitization order is noteworthy for operators who are trying to plan drilling units and to help companies evaluate their lease holdings.
The process of unitization is conceptually related to mandatory pooling (R.C. § 1509.27), and is part of our ongoing blog series on Ohio’s compelled participation laws. (Read part 1 and part 2.). A unitization order allows oil and gas operators to join, or unitize, recalcitrant mineral owners to create large tracts of land — often comprising hundreds of acres — necessary to profitably and efficiently produce hydrocarbons from shale formations while protecting each owner’s correlative rights.
On March 28, the Chief of the Division of Oil and Gas Resources Management (DOGRM — the oil and gas wing of ODNR) issued two orders to BP America Production Company (BP): the Lennington Unit and the Zerovich Unit.
Read the details of the orders here. 

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