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October

Suggested TMS Rule #5 and Proposed Response

Posted by bernell on October 2, 2014

The draft document titled, “SUGGESTED TMS POLICIES” is being considered by the Mississippi Oil and Gas Board at its October 15 meeting for an effective date of adoption as of its November meeting date.

There are 7 proposed policies.  I have previously covered the proposed policies 1-4 and my plans are to cover the 5th and 6th proposed policies tonight and # 7 on Sunday evening.

I’m covering these policies in order to better inform you about these proposals, but also in order to get your input into my own public comments on these policy changes.

For those wishing to view the four previous policies I have reviewed, here are the links:

http://tmshorizons.com/index.php/tms-news/2014-news/september/suggested-tms-rule-1-proposed-response/

http://tmshorizons.com/index.php/tms-news/2014-news/september/suggested-tms-rule-2-and-proposed-response/

http://tmshorizons.com/index.php/tms-news/2014-news/september/suggested-tms-rule-3-and-proposed-response/

http://tmshorizons.com/index.php/tms-news/2014-news/october-2014/suggested-tms-rule-4-and-proposed-response/

Now, here is policy #5 and my comments relative to it:

POLICY #5

No incomplete TMS permit application or docket shall be filed with the Mississippi state Oil & Gas Board.  Each TMS permit appliction shall consist of the following:

  1. A duly executed FORM 2 (Allication to Drill);

  2. All applicable permit application and docket filing fees;

  3. A duly certified unit location plat:

  4. Reserve Pit Information (including pit schematic) and

  5. Proof of Financial Responsibility pursuant to Statewide Rule 4(c)

The following requirements shall apply to all unit location plats filed with the Mississippi State Oil & Gas Board.

  1. Unit location plats shall be prepared by a Professional Land Surveyor and certified by the surveyor preparing the plat.  Plats shall bear the word “Certified” and shall have affixed thereto both the signature and stamp and/or seal of the surveyor.

  2. Plats must depict the exterior drilling unit boundaries as well as the proposed well location on the unit, including the estimated distance of the well from the two (2) nearest exterior drilling unit boundaries.

  3. In the case of directionally drilled or intentionally deviated wellbores, the plat must depict both the surface location and the bottomhole location of the well.

  4. In the case of horizontally drilled wells, the plat must depict the surface location, the point of entry or penetration point and the terminus point of the well.

  5. If the proposed well location has been surveyed and staked, the plat shall reflect that fact by additionally containing the words, “Surveyed location.”  If the well location has not been surveyed, the plat shall reflect that fact by additionally containing the words “Plat only (location not surveyed”).

  6. Unit location plats shall also depict all other wells located on the proposed drilling unit, as well as all adjoining units and the wells located thereon.

(vii)             In those instances in which a unit location plat has been submitted to the Mississippi State Oil and Gas Board as a play only (no surveyed well location), the operator within thirty (30) days after spudding of the well shall have prepared and filed with the Board a revised unit location plat depicting the actual surveyed well location.

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Certainly TMS permit applications need to be filed with complete plats. 

I had the occasion to request a plat of a filed permit as appeared in the preliminary docket a few months ago only to learn I could not obtain the plat, since it wasn’t yet available.  The issue was that the wrong township and range was used in the preliminary docket and I could not understand where the unit was located.

It would seem to be unfair to require mineral owners in a unit to comment upon filed applications within a certain time frame when, in fact, the location of the units are not made available to the public.

Let me preface the remainder of my comments with the fact that I have no technical expertise to call into question the details of this proposal.  All I have are questions without knowledge or experience to understand much of what I am asking.

First, it is my understanding that this “certified” plat is for the unit as a whole.

So, I am wondering about the next step. 

What about the survey requirements for mineral owners subsequent to the production of the well?  I am aware of disagreements over ownership decimals occurring and it is my understanding that the survey requirements are lower for these type surveys such that details on the surveys aren’t of much help in resolving the differences.

I have no desire to cause unnecessary expense on operating companies, but if a mineral owner disagrees with this lower standard of surveying, what remedy does this board have in place to allow for an amiable reconciliation of the differences? 

Are these ownership plats/maps required to be filed with the Mississippi Oil & Gas Board and when? 

Are they a matter of public record?

Is the only remedy for the landowner to obtain a survey and sue in court?

With 2,000 acre units in mind, it is tempting to make shortcuts, but in so doing it is likely to cause less than accurate allocations of income and no reasonable way to resolve those differences without expensive steps taken by land and mineral owners. 

I encourage this Board to have the vision and wisdom to help avoid unnecessary conflicts going forward.
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