No Black and White in the Oil Patch

When somebody asks me an oil and gas law question, one of my frequent responses (besides the lawyer’s classic “it depends”) is “nothing’s ever black and white in the oil patch except maybe crude and snow”.

I was recently asked how many feet an oil well has to be from a property line. The person asking thought his neighbor’s oil wells might be too close to the line. Here in Kansas, state regulations specify an offset of either 165 feet or 330 feet, depending on the county. Sounds fairly black and white, eh? But I asked, have you looked up the oil lease?

Turned out the property line at issue was between two quarter sections which at one time were covered by the same lease. So, it could be important how one quarter came to be released from the lease. Maybe there was a written agreement with the landowners at the time that waived the offset requirement. It might matter when the wells were drilled, whether before or after the one quarter was released.

It also turned out there’s neither a fence line between the quarters, nor has either quarter been surveyed. A survey might establish the property line several feet from where the landowner thinks it is. Even if there was a fence, it might not be on the boundary line, either by accident or by design and agreement of the respective landowners. If a survey showed a fence was not on the boundary, then there may be an issue as to how long the fence has been where it is and whether “adverse possession” has established a different boundary line than what a survey might show.

I could keep going with this, but I think you get the picture. I just thought this made a good example of how something that looks likes a simple question with a simple answer, isn’t really so simple, in the oil patch. Of course, this isn’t limited to the oil patch; it applies to virtually all areas of law practice. As for whether or not it applies in your case, well, it just depends. 🙂