The Wyoming Oil and Gas Conservation Commission (WOGCC) has proposed a new rule that will encourage mineral development and reduce permit hoarding in the state. Wyoming is currently a first to file state, meaning the first operator to file for a drilling permit gets it. The common practice has flooded the commission with over 1,000 applications a month.
Oftentimes, operators will hold onto permits and choose not to develop the minerals underneath. They can continue to renew that permit and sell the land with all of the permits later for more money. This means that some lands can go undeveloped for years.
The new rule the WOGCC is proposing will keep Wyoming as a first to file state but change the renewal process. If the permit holder hasn't drilled in the first two years, the permit reopens.
"Even though you're the operator of the DSU, it doesn't mean you can lock other people out. So now other people have the right to come in and actually drill the well. And if they do, then they become the operator of the drilling and spacing unit. So, it encourages development of the minerals," WOGCC Oil and Gas Supervisor Mark Watson explained.
A drilling and spacing unit, or DSU, is the area where a permit allows you to drill.
The proposed rule is planned to take effect on January 1, 2020. The WOGCC is holding a public meeting on July 30th in Casper to discuss the new rule, followed by a 45-day public comment period. The full proposed rule can be found on the WOGCC website.
