An interesting case has recently been filed in Louisiana challenging the authority of the Louisiana Department of Conservation to approve pooled units containing multiple wells. In Gatti et al. vs. State of Louisiana, et al., Number 589350, Division 23, filed in the 19th Judicial District Court in East Baton Rouge Parish, the plaintiffs sued the State Department of Conservation and several operators in the Haynesville field, including Chesapake, Encana, Exco, Conoco Phillips, Petrohawk, SWEPI, EOG, Questar, Forest and XTO, claiming that the Department of Conservation was routinely allowing the drilling of “alternate unit wells” on previously established units, in violation of Louisiana law. A copy of the petition may be found here.
Gatti v. St of Louisiana.pdf.
Louisiana has a forced-pooling statute that allows an operator to propose to the Department of Conservation a unit for a well which, if approved, forces all mineral owners in the unit to pool their interests for the drilling and production of that well. According to the plaintiffs, this statute only authorizes the Department to approve units large enough to cover an area drained by one well. The practice in Lousiana for the Cotton Valley and Haynesville fields is to obtain orders for 640-acre units, and later obtain approval to drill additoinal “alternate unit wells” on those units. The suit contends that this practice is unfair to the owners of minerals and royalties in the unit, and violates state law. The suit seeks certification of a class action on behalf of all owners of mineral rights in Haynesville Zone in Louisiana. It seeks a declaration that the Department has no authority to establish a unit having an area in excess of the area drainable by one well, and that any such unit is “null and void.” The suit also seeks unspecified damages against the defendant companies.