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Bill Detail: SB24-185

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Title Protections Mineral Interest Owners Forced Pooling
Status Introduced In House - Assigned to Agriculture, Water & Natural Resources (04/17/2024)
Bill Subjects
  • Natural Resources & Environment
House Sponsors J. Amabile (D)
Senate Sponsors S. Fenberg (D)
House Committee Agriculture, Water and Natural Resources
Senate Committee Agriculture and Natural Resources
Date Introduced 03/19/2024
Summary

Under current law, when 2 or more separately owned tracts are
within an oil and gas drilling unit (unit) established by the Colorado
energy and carbon management commission (commission), in the absence
of voluntary pooling and after a reasonable offer to lease, made in good
faith (offer to lease), current law allows the commission to enter an order
pooling the mineral interests of those tracts (pooling order) for the
development and operation of the unit if the applicant for the pooling
order:
  • Owns more than 45% of the mineral interests in the unit
(requisite ownership); or
  • Obtains the consent of the owners of more than 45% of the
mineral interests in the unit (requisite consent).
The bill changes current law by:
  • Requiring that a pooling order application include an
affidavit that declares that the applicant has the requisite
ownership or obtained the requisite consent (declaration),
which affidavit must include certain leasing and well
information;
  • Allowing an unleased mineral interest owner (unleased
owner), at least 60 days before the first noticed hearing
date, to file a protest with the commission disputing the
applicant's declaration (protest);
  • Requiring the commission, no later than January 1, 2025,
to adopt rules establishing a fair process for resolving a
protest and allowing an unleased owner to review certain
leasing information;
  • If a unit contains the mineral interests of an unleased owner
that has rejected an offer to lease, prohibiting an oil and gas
operator, on and after January 1, 2025, from drilling or
extracting minerals from a drilling unit owned by the
unleased owner and not voluntarily pooled before a pooling
order is entered by the commission;
  • Prohibiting the commission from entering a pooling order
that pools the mineral interests of an unleased owner if the
unleased owner is a local government that has rejected an
offer to lease and the minerals subject to the unleased
owner's mineral interests are within the local government's
geographic boundaries (local government unleased
interest); and
  • If a pooling order application proposes to pool a local
government unleased interest and the local government has
rejected an offer to lease, requiring the commission to deny
the application unless the applicant amends the application
to no longer pool the local government unleased interest.

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