Certification of Well Plugging/Reclassification
December 17, 2013
On November 30, 2013, the Pennsylvania Bulletin published the Certification of Well Plugging/Reclassification notice. The following is a summary.
Certification of Well Plugging
When can a producer stop paying impact fees when an unconventional gas well ceases production and is plugged? Upon certification that is filed with and time-stamped by the DEP.
Under Act 13, 58 Pa.C.S. §§ 2301 – 2318 (relating to unconventional gas well fee), payment of the impact fee ceases upon certification to the Department of Environmental Protection (DEP) by a producer that the unconventional gas well has ceased production and has been plugged according to the DEP regulations. See 58 Pa.C.S. § 2302(e) (relating to unconventional gas well fee). Consistent with Act 13, the certification date to the DEP is the date an acceptable certificate of well plugging is filed with and time-stamped by the DEP. The certification date is the date of the official DEP time-stamp placed on the certificate of well plugging. Note that the date plugging was physically completed, as supplied by the producer on the certificate of well plugging, is not the certification date to the DEP for purposes of 58 Pa.C.S. § 2302(e). Producers should keep good records to preserve any future rights arising from well or impact fee disputes. The Pennsylvania Public Utility Commission (Commission) encourages producers to maintain time-stamped copies of all certificates of well plugging filed with the DEP.
Reclassification of an Unconventional Well
How does a producer reclassify an unconventional well from horizontal to vertical, or vice versa? Producers must file the appropriate documents with the DEP.
When a producer wants to reclassify an unconventional well from horizontal to vertical, it must file with the DEP a Well Record to reclassify. When a producer wants to reclassify an unconventional well, in reverse order – from vertical to horizontal – it must file a Permit Application to Drill and Operate an Unconventional Well. Regarding reclassified unconventional wells, the date an acceptable reclassification document amending a well’s classification is filed with and time-stamped by the DEP is the reclassification date. The reclassification date is the date of the official DEP time-stamp placed on that document. Once again, the Commission encourages producers to maintain time-stamped copies of all documents amending well classifications filed with the Department.