2013 Kentucky Revised Statutes CHAPTER 353 - MINERAL CONSERVATION AND DEVELOPMENT 353.595 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 the notice, a certification which shall identify the person in
whose name the lands on which drilling operations are to be commenced
(4)
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) 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;
(5)
(6)
(7)
(8)
(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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