2014 Kentucky Revised Statutes CHAPTER 349 - COALBED METHANE DEVELOPMENT 349.070 Powers of Coalbed Methane Well Review Board to take actions necessary to prevent waste and protect rights of owners -- Objections by holders, lessors, and lessees -- Hearings.
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349.070 Powers of Coalbed Methane Well Review Board to take actions
necessary to prevent waste and protect rights of owners -- Objections by
holders, lessors, and lessees -- Hearings.
(1)
(2)
In order to prevent the waste of coalbed methane or to protect the correlative
rights of the owners of coalbed methane, the review board on its own motion or
upon application of an operator of a coalbed methane well or owner of coalbed
methane shall have the power to establish or modify drilling units, establish or
modify field rules, or unitize coalbed methane wells, pools or fields. Drilling
units, to the extent reasonably possible, shall be of uniform shape and size for
an entire pool or field. Any operator of a coalbed methane well or owner of
coalbed methane may apply to the review board for the creation or modification
of drilling units, the establishment or modification of field rules for a pool or
field, and the unitization of any coalbed methane wells, pools, or fields.
With respect to any request for the creation or modification of drilling units,
establishment or modification of field rules for the pool or field, and the
unitization of any coalbed methane wells, pools, or fields, the review board
shall grant or deny the request and issue an order consistent with the intent
and purposes of KRS Chapters 350 and 352 and this chapter, taking into
consideration the following factors that it considers applicable in the particular
proceedings:
(a) The area which may be drained efficiently and economically by the
proposed coalbed methane well or wells and the spacing requirements of
KRS 349.075;
(b) The plan of development for the coal, that drilling units conform to mine
development plans, and the need for proper ventilation of any mines or
degasification of any affected coal seams;
(c) The nature and character of any coal seam or seams which will be
affected by the coalbed methane well or wells;
(d) The surface topography and mineral boundaries of the lands underlaid by
the coal seams to be included in the unit;
(e) Evidence relevant to the proper boundary of the drilling unit;
(f) The nature and extent of ownership of each coalbed methane owner or
claimant and whether conflicting claims exist;
(g) Whether the applicant for the drilling unit proposes to be the operator of
the coalbed methane well within the drilling unit; and if so, whether the
applicant has a lease or other agreement from the owners or claimants of
a majority interest in the proposed drilling unit;
(h) Whether a disagreement exists among the coalbed methane owners or
claimants over the designation of the operator for any coalbed methane
well within the drilling unit; and if so, relevant evidence to determine which
operator can properly and efficiently develop the coalbed methane within
the drilling unit for the benefit of the majority of the coalbed methane
owners;
(i) If more than one person is interested in operating a coalbed methane well
within the drilling unit, the estimated cost of submitting by each such
person for drilling, completing, operating and marketing the coalbed
(3)
(4)
(5)
(6)
methane from any proposed coalbed methane well or wells;
(j) Any other available geological or scientific data pertaining to the pool
which is proposed to be developed;
(k) The correlative rights of the operators and owners of coalbed methane,
so that each operator and owner may obtain his or her just and equitable
share of production from the coalbed methane; and
(l) Any other factor the review board determines should be considered
consistent with KRS Chapters 350 and 352, and this chapter.
Upon consideration of the matters raised at the hearing, the review board shall
render a decision based upon whether to establish or modify a drilling unit,
establish or modify field rules or establish or modify the unitization of coalbed
methane wells, pools or fields. The review board shall enter a written order
containing findings of fact and conclusions which address any relevant
considerations in subsection (2) of this section and based thereon shall issue
and file with the department a written order:
(a) Establishing or modifying a drilling unit, field rules or unitizing coalbed
methane wells, pools or fields;
(b) Refusing to establish or modify a drilling unit, field rules or unitization of
coalbed methane wells, pools or fields; or
(c) Attaching certain conditions to the establishment or modification of a
drilling unit, field rules, or unitization of coalbed methane wells, pools or
fields.
In establishing or modifying a drilling unit for coalbed methane wells, and in
order to accommodate the unique characteristics of coalbed methane
development, the review board may require that drilling units conform to the
mine development plan, if any. If requested by the coal interest holder, well
locations and spacing shall correspond with mine operations, including the
drilling of multiple coalbed methane wells on the same surface location of each
drilling unit.
If an order to establish or modify a drilling unit, field rules or unitization of
coalbed methane wells, pools or fields will allow a coalbed methane well to be
drilled into or through a workable coalbed, any coal interest holder and any
record oil and gas lessor and lessee within the area to be covered by the
drilling unit, field rules or unitization of coalbed methane wells, pools or fields
may object to the establishment or modification of the drilling unit, field rules or
unitization of coalbed methane wells, pools or fields.
The review board may continue a hearing to allow for further investigation and
the gathering and taking of additional data and evidence. If at any time during a
hearing there is not sufficient evidence for the review board to determine field
boundaries, or drilling unit size or shape, the review board may enter a
temporary order establishing provisional drilling units, and field boundaries for
the orderly development of the pool or field, pending receipt of the information
necessary to determine the ultimate pool or field boundaries, and spacing of
wells for the pool or field. Upon additional findings of fact, the boundaries of a
pool or field and drilling units for the pool or field may be modified by the review
board.
(7)
(8)
Unless otherwise provided for by the review board, after an application for a
hearing to establish or modify drilling units or pool boundaries has been filed,
no additional wells shall be permitted in the pool or field until the review board's
order establishing or modifying the pool or field or unit has been entered.
After the review board issues a field or pool spacing order which creates
drilling units or a pattern of drilling units for a pool or field, should an operator
or owner of coalbed methane apply for a permit or otherwise indicate a desire
to drill a coalbed methane well outside of such drilling units or pattern of drilling
units and thereby potentially extend the pool or field, the review board may, on
its own motion or the motion of any interested person, require that the coalbed
methane well be located and drilled in compliance with the provisions of the
order affecting the pool or field.
Effective:July 13, 2004
History: Created 2004 Ky. Acts ch. 65, sec. 14, effective July 13, 2004.
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