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Permalink Reply by dbob on February 26, 2013 at 12:07

You can find the text of the bill here:

http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=201...

Reading through it, they are establishing law for a lot of things - severance tax, discharges, etc.  

It will end a moratorium on horizontal wells, and allow for hydraulic fracturing.  ..

Based on this report:

http://www.geology.enr.state.nc.us/pubs/PDF/NCGS_IC_36_Oil_and_Gas.pdf

there have been a total of 128 oil and gas exploration wells drilled in the state.  I don't mean to be impolite, but if the moratorium is lifted, and there are a few successful test wells, you'll have a lot more to worry about than registration of landmen.  There is literally more than a century of law on the books in some of the oil and gas producing states, and it will be interesting to see how that played out...  

It would probably be good for the state if the moratorium was lifted in 2015.  It will take some time to figure out if there is shale oil or gas worth developing, develop an infrastructure, etc.  Start ramping development in 2016 and 2017, and it might be in good position when many of the export projects have been built out and prices are a bit higher than now, but stable.  

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Permalink Reply by Curious Will on February 26, 2013 at 19:16

Thanks, dbob, for the answer and the links.  I do realize that there will be many issues.  Actually, I opened with the discussion about landmen because I felt that it would be less controverial for many of the members and wanted to see what else others might come up with to add to the discussion.

The main issue that seems to have most of the people concerned in N.C. is probably fracking as the geology is different from most of the other areas that are being drilled.  It is my understanding that the formation is shallower for one thing and they are not familiar with anything related to  o&g  except pretty much filling up their cars or heating their homes. 

Also, very few people have any experience with leasing in N.C..  Many of the leases have been written for $10.00 per year for 10 years or even less.  Of course, as you pointed out there have not been laws that allowed for horizontal drilling or infrastructure in place; therefore it is more of a gamble.

If development would ramp up it would indeed be an experiment for this state that is just an infant as far as production issues. 

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Permalink Reply by dbob on February 27, 2013 at 3:07

In that context, the right way to lift the moratorium is to provide for a limited number of exploratory well permits - something manageable - like 50 or 100 permits, with very specific requirements on filing a drilling plan and reqirements for state regulators to inspect and approve various operations. 

This will give the regulatory agency some time to develop more understanding of what is going on, and to some degree, limit the intitial "land rush" attitude that may prevail.

 

 

 

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