Some oil, gas companies sidestep limits on sizes of drilling fields

Some oil, gas companies sidestep limits on sizes of drilling fields

Staff report

YOUNGSTOWN

With the rise of horizontal shale drilling, some oil and gas companies have pursued regulatory orders that would bypass unit size provisions built into older lease agreements between land owners and drilling companies.

Before shale drilling emerged as a widespread practice in this state, most Ohio leases limited unit sizes for drilling activities to 160 acres or less. That’s because those agreements were negotiated when conventional drilling practices only required a well to be drilled straight down into the earth.

But fracking requires a well to also extend laterally deep below ground, thus requiring more acreage to access natural gas in the underlying shale formations.

Anticipating the needs of horizontal drilling, landowners and drillers in Ohio began negotiating newer leases that contain unit size provisions of 640 acres or more in 2010.

Traditionally, horizontal drilling companies, when taking assignment of previously-negotiated leases, have either negotiated new lease amendments for larger unit sizes or drilled wells that conform with the build-in unit limits, said Alan Wenger, an oil and gas attorney with Harrington, Hoppe & Mitchell in Youngstown.

But in the last year or so, Wenger said, some companies have tried to avoid renegotiating leases by including lessors with unit size limits in unitization applications to the Ohio Department of Natural Resources.

Read the full story Monday in The Vindicator and on Vindy.com.