West Virginia Courts Sorting Out Marcellus Well Drilling Rules

Charleston, WV – Although the interest in Marcellus shale natural gas deposits in Pocahontas County has diminished considerably, many residents still remain vigilant in keeping an eye on drilling operations in other parts of the state. And apparently so are the West Virginia courts.

The courts are looking into some big issues, like spacing out the wells to get the most natural gas without tearing up the landscape in the process, and how to split royalties fairly. West Virginia Surface Owners Rights Organization co-founder Dave McMahon says a recent ruling in a McDowell County case is a good first step in addressing how close the wells should be spaced.

“From the surface owners point of view we just want fewer wells drilled to get the same gas” says McMahon. “We think the geology is that if the wells are properly spaced, you actually get out more gas with fewer wells because the reservoir pressure isn’t exhausted.”

In the McDowell case of Blue Eagle Land Company vs West Virginia Oil and Gas Conservation Commission, drillers argued that the state doesn’t have the right to regulate well spacing. McMahon says many of the Marcellus wells can be drilled from a single spot and he says this ruling encourages that. This issue also puts increased emphasis on the upcoming elections as drilling regulations may come up in the next legislative session.

Another issue near and dear to WV SORO is that of royalty sharing where gas could be drained from an adjacent well. McMahon says because of the way the gas flows, if a well is drilled next to your minerals, you should get a share of the royalties.

“They can drill right next to a neighboring mineral owner and drain the gas out of that tract, as long as they don’t actually drill into it” he says. “And that gas belongs to the driller and not to the person being drained.”

In this, McMahon and the industry are in agreement in favoring some kind of royalty sharing. McMahon advises landowners to be careful of the allure of royalty payments and jobs in Marcellus shale drilling.

“If you own the surface and you own the minerals, perhaps it’s worth the tradeoff to you because you’re going to get a lot of royalties” he says. “But if you only own the surface, all you get is bunch of hassle and a slice of your almost heaven gets dug up, and you get a pittance to compensate you.”

Thanks to the WV News service for the information in this report.