SB18-230

SB18-230 - Modify Laws Drilling Units Pooling Orders

Passed/Signed into Law
Concerning modification of the laws governing the establishment of drilling units for oil and gas wells, and, in connection therewith, clarifying that a drilling unit may include more than one well, providing limited immunity to nonconsenting owners subject to pooling orders, adjusting cost recovery from nonconsenting owners, and modifying the conditions upon which a pooling order may be entered.

Current law authorizes 'forced' or 'statutory' pooling, a process by which any interested person–typically an oil and gas operator–may apply to the Colorado oil and gas conservation commission (commission) for an order to pool oil and gas resources located within a particularly identified drilling unit. After giving notice to interested parties and holding a hearing, the commission can adopt an order to require an owner of oil and gas resources within the drilling unit who has not consented to the application (nonconsenting owner) to allow an oil and gas operator to produce the oil and gas within the drilling unit notwithstanding the owners lack of consent.

The bill clarifies that an order entered by the commission establishing a drilling unit may authorize more than one well. The order must specify that a nonconsenting owner is immune from liability for costs arising from spills, releases, damage, or injury resulting from oil and gas operations on the drilling unit.

Currently, a nonconsenting owner must pay the consenting owners from the nonconsenting owner's share of production 200% of the nonconsenting owner's proportionate share of the costs of drilling, including equipment. The bill limits this 200% cost recovery to wells 5,000 feet or less in depth and increases the cost recovery to 300% for wells greater than 5,000 feet in depth and for horizontal wells.

Current law prohibits entry of a pooling order until the mineral rights owners have been given a reasonable offer to lease their rights. The bill specifies that the offer must be given at least 60 days before the hearing on the order and must include a copy of or link to a brochure supplied by the commission that clearly and concisely describes the pooling procedures and the mineral owner's options pursuant to those procedures.

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

 

Latest update: June 1, 2018
06/01/2018 - Governor Signed
05/15/2018 - Sent to the Governor
05/15/2018 - Signed by the Speaker of the House
05/14/2018 - Signed by the President of the Senate
05/03/2018 - Senate Considered House Amendments - Result was to Concur - Repass
05/03/2018 - House Third Reading Passed - No Amendments
05/02/2018 - House Second Reading Special Order - Passed with Amendments - Committee
05/02/2018 - House Committee on State, Veterans, & Military Affairs Refer Amended to House Committee of the Whole
04/24/2018 - Introduced In House - Assigned to State, Veterans, & Military Affairs
04/24/2018 - Senate Third Reading Passed - No Amendments
04/23/2018 - Senate Second Reading Passed - No Amendments
04/19/2018 - Senate Second Reading Laid Over to 04/23/2018 - No Amendments
04/17/2018 - Senate Second Reading Laid Over to 04/19/2018 - No Amendments
04/16/2018 - Senate Second Reading Laid Over Daily - No Amendments
04/13/2018 - Senate Second Reading Laid Over Daily - No Amendments
04/11/2018 - Senate Committee on Agriculture, Natural Resources, & Energy Refer Unamended to Senate Committee of the Whole
04/04/2018 - Introduced In Senate - Assigned to Agriculture, Natural Resources, & Energy