Legislative Affairs February 2011

LEGISLATIVE AFFAIRS COMMITTEE REPORT

The following legislative report is submitted by Blaine Dyer and Ryan Cole, Co-Chairs of the OCAPL Legislative Affairs Committee. If you would like to discuss how a particular bill might impact your business and operations, you may contact Blaine (Blaine@thedyerlawfirm.com; 405.831.1145) or Ryan (rcole@maproyalty.com) at your convenience.

            The deadline for introducing new bills has passed, and the new bills that could affect the oil and gas industry are now being discussed. At this point of the process, many of the new bills are in their “shell” form, meaning that the specific details of their content have not yet been fully formulated. Over the coming months, more details about the bills will come to light.

            If you are interested in a specific bill indicated below, you may obtain a copy of the full text of the bill by calling the Senate Bill Distribution, Room 310 at the State Capitol (405-521-5514). Copies may also be downloaded from the Legislative Services Bureau web site http://www.lsb.state.ok.us.

            If you are in favor of, or opposed to, any specific legislation, call or write your State Representative and/or your Senator. Few people take the time to contact members of the Legislature, and the magnitude of a simple letter or telephone call can have a real effect on pending legislation.

            The bills listed below represent a selection deemed to be particularly relevant to the oil and gas industry. A more thorough listing of active bills with additional information, status and author will be available on the OCAPL website. Because the range of bills that impact oil and gas is very broad, it is not possible to provide a full account of every bill. If there is a particular bill you would like OCAPL to focus more closely upon, please notify the OCAPL legislative committee and we will make efforts to make sure our members remain satisfied.

Respectfully,

Blaine M. Dyer, Esq. ~ Legislative Affairs Committee

HB1823: This bill would provide an exception for horizontal units from certain well spacing and drilling unit limits; establishing a maximum size of a well spacing and drilling unit for certain horizontal units. In particular the bill reads, “for a horizontal unit that will contain at least one lateral exceeding five thousand (5,000) feet in length, the acreage to be embraced within each unit shall not exceed one thousand two hundred eighty (1,280) acres for a gas well plus ten percent (10%) tolerance.

HB1909: Due to advancements in horizontal drilling techniques for wells drilled and completed in shale formations in Oklahoma, this bill calls for modification of the historical statutory spacing scheme found in Section 87.1 and Sections 287.1 through 287.15 of Title 52 of the Oklahoma Statutes, in particular with laterals exceeding five thousand two hundred eighty (5,280) feet in length.

SB135 & SB242: These bills propose a new law also dealing with spacing requirements for a horizontal well, allowing for the unitization of two or more, but not to exceed four, governmental sections into a single unit for the uniform development of the shale formation through the use of extended lateral horizontal wells.

SB660: This bill addresses the increasing areas of conflict between the long-standing oil and gas production and exploration industry and the newly developing wind energy industries; asking the Oklahoma Corporation Commission to study the legal and equitable relationships between the owners of surface rights incident to wind energy and the owners of mineral interests incident to the right to explore for and produce oil and gas before conflicts arise leading to expensive legal battles and unnecessary delays in production. 

SB113: This bill, which relates to permitting and regulation of seismic exploration, would require surety to be filed with the Secretary of State in certain amounts prior to the issuance of a permit; requiring the Oklahoma Corporation Commission to determine the amount of the bond and duration of the certain surety.

SB641: This bill, which relates to the Production Revenue Standards Act, modifies the amount of certain interest penalties and authorizes certain persons to seek court determinations.

SB889: This bill would create a rebuttable presumption that property was obtained by undue influence in any situation where a person with real or apparent authority over an elderly or disabled person transfers the elderly or disabled person’s real or personal property for less than full consideration.