2016 Kentucky Revised Statutes CHAPTER 353 - MINERAL CONSERVATION AND DEVELOPMENT .595 Notice to surface owner of intent to drill oil or gas well -- Compensation for damage to surface -- Restoration of surface.
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353.595 Notice to surface owner of intent to drill oil or gas well -- Compensation
for damage to surface -- Restoration of surface.
(1)
(2)
(3)
As used in this section:
(a) "Person" means any natural person, corporation, firm, partnership, venture,
receiver, trustee, executor, administrator, guardian, fiduciary, or other
representative of any kind, and includes any government or any political
subdivision or agency thereof.
(b) "Drilling operations" means the drilling, deepening, or conversion of a well
for oil or gas production, core hole for oil or gas purposes, or drill hole for a
stratigraphic test for oil or gas purposes.
(c) "Entry" means the moving upon the surface of land with equipment to
commence drilling operations, but shall not include entry for the survey for or
ascertaining or identification of a well location.
(d) "Operator" means the person, whether the owner or not, who applies for or
holds a permit for drilling operations or who is named as the principal on a
bond for a permit for a well that was issued by the department.
(e) "Surface owner" means the person in whose name the surface of the land on
which drilling operations are contemplated, and who is assessed for purposes
of taxes imposed according to the records of the property valuation
administrator of the county where the land is located as certified by the
property valuation administrator.
(f) "Production operation" means the operation of a well for the production of oil
or gas, including all acts, structures, equipment, and roadways necessary for
the operation.
(g) "New well" means a well that is spudded after July 13, 1990, and does not
utilize any part of a well bore or drilling location that existed prior to July 13,
1990.
(h) "Completion of the well" means completion of those processes necessary
before production occurs, including the laying of flow lines and the
construction of the tank battery. If the well is not productive, the date of
completion of the well shall be the day it is plugged and abandoned.
This section shall be applicable only for the drilling operations of new wells except
as provided in subsection (7) of this section. This section shall not apply for
reworking operations on a well. This section shall be applicable only when the
surface owner has not consented in writing to the drilling operations and:
(a) There has been a complete severance of the ownership of the oil and gas from
the ownership of the surface; or
(b) The surface owner owns an interest in the oil and gas.
(a) Prior to commencement of the drilling of a well, the operator shall give written
notice to the surface owner of the operator's intent to commence drilling operations.
(b) The operator shall, for the purpose of giving notice, secure from the property
valuation administrator's office, within ninety (90) days prior to the giving of
(4)
the notice, a certification which shall identify the person in whose name the
lands on which drilling operations are to be commenced and who is assessed
at the time the certification is made. The written certification made by the
property valuation administrator of the surface owner shall be conclusive
evidence of the surface ownership.
(c) The notice required to be given by the operator to the surface owner shall
identify the following:
1.
The location of the proposed entry on the surface for drilling operations
and the date on or after which drilling operations shall commence.
2.
A photocopy of the drilling application to the department for the well to
be drilled.
3.
The name, address, and telephone number of the operator.
4.
An offer to discuss with the surface owner those matters set forth in
subsection (4) of this section prior to commencement of drilling
operations.
(d) If the surface owner elects to meet the operator, the surface owner shall
request the operator to schedule a meeting at a mutually agreed time and place
within the limitations set forth herein. Failure of the surface owner to contact
the operator at least five (5) days prior to the proposed commencement of
drilling operations shall be conclusively deemed a waiver of the right to meet
by the surface owner. The meeting shall be scheduled between the hours of
nine o'clock in the morning and the setting of the sun of the same day and
shall be at least three (3) days prior to commencement of drilling operations.
Unless agreed to otherwise, the place shall be located within the county in
which drilling operations are to be commenced where the operator or his agent
shall be available to discuss with the surface owner or his agent those matters
set forth in subsection (4) of this section.
(e) The notice shall be given to the surface owner by either:
1.
Certified mail addressed to the surface owner at the address shown in the
certification obtained from the property valuation administrator, which
shall be postmarked at least ten (10) days prior to the commencement of
drilling operations; or
2.
Personal delivery to the surface owner at least eight (8) days prior to the
commencement of drilling operations.
(f) Notice to the surface owner as defined in this section shall be deemed
conclusive notice to the record owners of all interest in the surface.
The operator, or his agent shall, if the surface owner accepts the offer to discuss, be
available at the time agreed, date, and place to discuss with the surface owner the
following:
(a) Placement of roads to be constructed by the operator;
(b) Points of entry upon the surface for drilling operations;
(c) Construction and placement of pits used for drilling operations;
(d)
(5)
(6)
(7)
(8)
Restoration of fences to be cut in order to make entry upon the surface for
drilling operations;
(e) Use of water on the surface of the lands;
(f) Removal of trees; and
(g) Surface water drainage changes caused by drilling operations.
The surface owner shall be entitled to reasonable compensation from the operator
for damages to growing crops, trees, shrubs, fences, roads, structures,
improvements, and livestock thereon caused by the drilling of a new well. The
surface owner shall be entitled to reasonable compensation from the operator for
subsequent damages to growing crops, trees, shrubs, fences, roads, structures,
improvements, and livestock caused by subsequent production operations of the
operator thereon. The surface owner shall be entitled to reasonable compensation
for all negligent acts of the operator that cause measurable damage to the productive
capacity of the soil. In addition, the operator shall not utilize any more of the
surface estate than is reasonably necessary for the exploration, production and
development of the mineral estate.
The compensation required pursuant to subsection (5) of this section shall be paid in
any manner mutually agreed upon by the operator and the surface owner, but the
failure to agree upon, or make the compensation required, shall not prevent the
operator from commencement of drilling operations. The operator shall tender to
the surface owner payment by check or draft in accordance with the provisions of
this section no later than ninety (90) days after completion of the well. The surface
owner's remedy shall be an action for compensation in the Circuit Court in which
the lands, or the greater part thereof, are located on which drilling operations were
conducted. If the operator fails to tender payment within the ninety (90) day period
or if the tender is not reasonable, the surface owner shall be entitled to reasonable
compensation as provided in this section, as well as attorney's fees. If the operator
relies on a third-party appraiser's assessment of damages there shall be no award of
attorney's fees.
In conjunction with the plugging and abandonment of any well or the reworking of
any well, the operator shall restore the surface and any improvements thereon to a
condition as near as practicable to their condition prior to commencement of the
work. The surface owner and operator may waive this requirement in writing,
subject to the approval of the department that the waiver is in accordance with its
administrative regulations.
Nothing in this section shall be construed to diminish the rights of the operator or
surface owner as they exist by established common law. Any compensation paid
and accepted pursuant to the provisions of subsections (5) and (6) of this section
shall be a complete bar to the assertion of any other remedy for such damages.
Effective: July 13, 1990
History: Created 1990 Ky. Acts ch. 128, sec. 1, effective July 13, 1990.
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