American Oil and Gas Reporter - February 2015 - 128

ConventionSection: Ohio Oil & Gas Association

OOGA Hopes To Establish
Timeline For Unitization
By Corinne Westeman

OOGA Winter Meeting
Columbus, Oh.

COLUMBUS, OH.-In time-consuming
and labor-intensive industries, business
leaders need as much certainty as possible.
Delay risks resources and time. Oil and
natural gas operators in Ohio are looking
to clarify and tighten processing timelines,
the Ohio Oil & Gas Association says.
OOGA Executive Vice President
Shawn Bennett says the association's top
priority for the 2015 Ohio Legislature is
convincing state lawmakers to pass legislation establishing statutory timelines
for processing and ruling on unitization
applications.
"Several companies have applied for
units, but have had no response, and there
is no indication when they will get one,"
he remarks. "These OOGA members
have invested a great deal of capital in
these sites, and a process with no timeline
does not allow for certainty or fluid decision making."
Unitization is among the several issues
Bennett says the association will deal
with during this year's legislative session.
They also will be discussed during
OOGA's winter convention, March 1113 at the Hilton Columbus at Easton.
Unitization Ruminations
According to Bennett, OOGA wants
to ensure that large tracts of land can be
pooled in the most environmentally responsible manner. This allows companies
to bring together various leases and complete a final unit size. "Say a company
has 90 percent of its landowners signed
under lease, but that only gives it 600
acres, and the company needs a 700-acre
tract to make its unit size work," he describes. "If it finds two people, each with
50 acres, unitization brings in those tracts
of land to make the company's unit work.
"It's pooling, but on a larger scale," he
clarifies. "It is compensated pooling. Companies are able to unitize large tracts to
ensure proper and responsible development.
You cannot allow the minority to discourage development for the majority."
Because Ohio's Utica Shale play still
is developing, Bennett says much of the

Wednesday, March 11
11:30 a.m.-5 p.m. Exhibitor Registration
Open, Hilton Columbus at Easton
Noon-4 p.m. Exhibitor Setup
1:30-2 p.m. Board of Trustees/Committee
Chair Picture
2-4 p.m. Board of Trustees Meeting
4-5 p.m. Ohio Geological Society Meeting
RSVP Only
"Hydraulic Fracturing and Earthquakes:
Ethically, How Do We Move Forward
and Do the Right Thing?" Donald D.
Clarke, AAPG Distinguished Ethics
Lecturer
5-7 p.m. Corporate Member Reception

Thursday, March 12
7:30 a.m.-7 p.m. Registration Open, Hilton
Columbus at Easton
7:30-9 a.m. Membership Breakfast
8 a.m.-5 p.m. Trade Show Open
9-11:30 a.m. Business Session One
11:30 a.m.-1 p.m. Society of Petroleum
Engineers Scholarship Luncheon
1-4:30 p.m. Business Session Two
4:30-5:30 p.m. PAC Reception
5:30-7:30 p.m. President's Reception,
Ballroom

Friday, March 13
7:30 a.m.-12:30 p.m. Registration Open,
Hilton Columbus at Easton
7:30-9 a.m. Membership Breakfast
7:30 a.m.-Noon Trade Show Open
9-11:30 a.m. Business Session Three
Noon-2 p.m. Membership Luncheon and
Awards
2-4 p.m. Exhibitor Breakdown

low-hanging fruit in terms of land has
been leased and developed already. Unless
producers are able to unitize, many will
be unable to complete their well site
units. "Moving forward, companies are
not going to have easy, cookie-cutter
tracts of land," he comments. "They will
need to unitize small portions of either
holdouts or state-owned lands, such as
roads."
While Ohio allows for unitization,
Bennett says the lack of a clear statutory
timeline leaves companies in limbo, wait-

128 THE AMERICAN OIL & GAS REPORTER

ing for approval to complete their units.
Along with making the matter one of its
top legislative priorities, OOGA indicates
it also will continue talks with the Ohio
Department of Transportation about unitizing state-owned roads.
"Roads are dividing necessary acreage
for many stakeholders," Bennett remarks.
"The inability to unitize roads sterilizes
landowners' property rights so that they
never will realize the economic potential
they can gain from the minerals underneath
their acreage."
OOGA Operations Managing Director
and Director of Governmental Affairs
Brian Hickman emphasizes that the association will keep pushing until "Ohio's
revised law states when a hearing on a
unitization application should be held,
or when a decision (on that application)
should be rendered."
"We have reports from our members
of applications being processed for a year
or more, with no indication of how much
longer the process will take," Hickman
continues. "Our members need that certainty, because they invest so much capital
in their projects. We hope to establish a
time frame this year in which a hearing
must be held, and an application approved
or denied. Even if the timeline is longer
than we would like, at least it will be certain, and that is key."
Awaiting Legislation
OOGA President David Hill, owner
of David R. Hill Inc. in Byesville, Oh.,
says the association also is preparing to
deal with tax legislation. A 2.5 percent
severance tax passed the Ohio House in
2014, but died in the Senate. OOGA supported the legislation, but Hill expresses
that, in retrospect, he is glad it did not
pass. "A 2.5 percent severance tax was
fine with $100 oil and $4 gas," he comments. "But the economic footprint has
cut the Utica Shale play in half, and 2015
will be difficult enough."
Hill says severance taxes likely will
remain a topic of discussion in the legislature. However, he suggests, lackluster
oil and gas prices make the issue a nonstarter. "Severance taxes are meant to
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