Relating to oil and gas wells that traverse multiple tracts.
Impact
One of the significant impacts of HB1552 is the option it gives operators to produce oil and gas from wells extending across multiple mineral interests without the necessity of unanimous agreement from all affected owners. If no agreement exists, the operator can allocate production based on their determination of the output from each tract. This shift offers more streamlined operations in the oil and gas sector, potentially enhancing productivity while addressing conservation concerns.
Summary
House Bill 1552 seeks to amend Section 85.046 of the Natural Resources Code to facilitate the drilling and production of oil and gas wells that span multiple tracts of land. The bill permits operators or lessees, unless expressly prohibited by legal agreements, to drill and operate wells across different properties in order to prevent waste, promote conservation, and protect correlative rights. The provisions in HB1552 emphasize the need for written notice to affected owners regarding the allocation of production from these wells.
Contention
Notably, the bill raises potential areas of contention among stakeholders in the oil and gas industry. Proponents argue that HB1552 will lead to a more efficient and economically advantageous approach to resource extraction, reducing legal disputes and operational delays. However, opponents may express concerns about the implications for mineral rights and equitable compensation for royalty owners when allocations are determined solely by operators. The need for a balance between efficient production and the protection of owners' correlative rights is likely to be an ongoing debate.
Additional_provisions
The bill includes a severability clause, ensuring that if any part of the act is deemed invalid, other provisions will remain effective. Furthermore, HB1552 outlines that it will take immediate effect if a two-thirds majority vote is achieved in the legislature; otherwise, its provisions will come into effect on September 1, 2015.
Relating to the reduction and plugging of orphaned oil and gas wells; providing for the imposition of a fee and an exemption from certain taxes and fees.
Relating to the reduction and plugging of orphaned oil and gas wells; providing for the imposition of a fee and an exemption from certain taxes and fees.
Relating to the ownership of the pore space underlying the surface of land and to the use of that space for the geologic storage of carbon dioxide; authorizing a fee.