At an April 23, 2019 public hearing, the Chairman of the West Virginia Oil and Gas Conservation Commission (“OGCC”) announced the Commission’s intention to introduce an emergency rule for setback/spacing standards for horizontal deep wells (below the Onondaga) in West Virginia. According to the Chairman, the emergency rule, expected to be filed by June 1, will grant authority to the OGCC to establish setback/spacing standards for each distinct deep geologic formation within the state through the issuance of “Operational Orders.”

The OGCC ignored proposed modifications to the current rules submitted by industry trade groups (WVONGA and IOGAWV) for promulgation through legislative rulemaking. Those recommendations included various revisions to existing regulations for horizontal deep wells, including the elimination of minimum spacing/setback requirements for non-productive well intervals, the reduction of setbacks under certain circumstances, the elimination of spacing requirements between wells operated by the same operator, and the elimination of spacing requirements between wells of different operators provided the operators had a written agreement establishing spacing distances.

The Chairman advised that the OGCC intends to circulate a draft Operational Order relative to the Utica formation for public review on June 1, 2019. Comments will be accepted until July 1, 2019, with a target date of August 1, 2019 for a final Operational Order to be issued.

At this point, it is difficult to predict what details will be included in the emergency rule. We will continue to monitor this issue and provide more information once the emergency rule is filed.