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Did I Miss Something? What Happened in the Energy Sector in the Rockies Around the Holidays

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Returning to work after the holiday season may have left many of you wondering if you missed anything important while you were in a cookie-induced holiday slumber. 

Here is a short summary of some key items that happened in the energy sector in the Rocky Mountain region around the holidays to keep you in the loop:

Wyoming Amended APD Rules

Effective December 20, 2019, the
Application for Permit to Drill (“APD”) rules have been amended for the State
of Wyoming.  The revisions to the APD
rules can be found here

It is no secret that the number
of challenges to oil and gas operatorship have increased recently in Wyoming
and that those challenges frequently result in a costly and time-consuming
process that ultimately ends up delaying development. 

Wyoming’s APD rules were amended
in response to the increased volume of drilling permits filed in the Cowboy
State and are an effort by the Wyoming Oil and Gas Conservation Commission
(“WOGCC”) to reduce not only the backlog of permits, but costly battles for
operatorship. 

Here is a quick summary of what you need to know about the new APD Rules – for more detail, check out the rules here:

  1. Wyoming remains a “first-to-file” state when determining operatorship – the race is still on.
  2. BUT there are now time limits (2-year anniversary of the most recent spud well in the DSU) and the opportunity/procedure for a challenging operator to seek operatorship.

The new WOGCC Rules – Chapter
3, Section 8
, are worth a read for the details; specifically, subsections
8(l) and 8(m), the latter of which articulates the process that a challenging
operator will utilize, within the two-year window.  The Notice of Intent to File an 8(m)
Application and the 8(m) Hearing Application under Section
8(m)
are going to be the new meat and potatoes.  Note that there are ten (10) criteria for the
8(m) Application that must be included when challenging operatorship and these
criteria are contained in Section
8(m)(i)
.   

TAKEAWAY: The takeaway is truly that Wyoming’s rule changes are an effort to articulate not only a clear and streamlined operatorship process in Wyoming, but a procedure for challenges to operatorship as well.  Here’s hoping the changes will address the operatorship issues.    

Colorado Provides Draft Wellbore Integrity Rules

On New Year’s Eve, the Colorado
Oil and Gas Conservation Commission (“COGCC”)
made the draft wellbore integrity rules available.  The draft wellbore integrity rulemaking was
shared on the COGCC website on December 31, 2019 via Google Drive, which can be
accessed here
or directly from the COGCC website here.  The revisions to the draft form are provided
in clean and also redline form to easily see the new changes, which are far too
numerous to describe.  The revisions
include new definitions, changes in bradenhead testing, isolation of coal seams
and protected water, and changes to the requirements for the well location
plat, casing and cement plan and requirements for stimulation at depths of
2,000 feet or less provided with a Form 2 A – Application for Permit to Drill,
just to name a few. 

TAKEAWAY: The draft wellbore integrity rules were made public at a time when many of us may have missed it, yet they contain significant revisions to the rules.  The deadline to submit a Request for Party Status in connection with the wellbore integrity rulemaking is Monday, January 13, 2020. 

North Dakota Rule Changes in Process

The North Dakota Industrial
Commission (“NDIC”) has been in the process of adopting changes to the oil and
gas rules in the state since last spring/summer.  The amended rules were approved by the NDIC
on or about November 25, 2019 and can be found here.  On December 20, 2019, the final rules were
submitted to the Attorney General for a legal opinion on the same, which will
be provided on or about January 24, 2020, according to the Timetable
for Adopting Oil and Gas Rules

TAKEAWAY: The North Dakota rule changes are in process and will be effective April 1, 2020, reportedly after the Attorney General confirms their legality and after approval of the Administrative Rules Committee. 

Some key things certainly took place in the energy sector in the Rocky Mountain region around the holidays!

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