As used in this chapter:
(1) “Abandoned” when used in connection with a well or hole means a well or hole which has never been used, or which, in the opinion of the department, will no longer be used for the production of coalbed methane or the injection or disposal of fluid therein;
(2) “Coal interest holder” means every record coal owner, record coal lessee, mine licensee as defined in KRS § 352.010(1)(r) and mine permittee as defined in KRS § 350.010(21) whose coalbed is penetrated, or proposed to be penetrated, by a coalbed methane well;
(3) “Coalbed” or “coal seam” means a seam of coal, whether workable or unworkable;
(4) “Coalbed methane” means gas produced from a reservoir found in a coalbed, a mined-out area, or gob;
(5) “Coalbed methane well” means any well drilled, deepened, converted, or reopened for the purpose of capturing coalbed methane for sale or use. Any well initially used for a coal mining-related purpose, such as a vent well, but which is subsequently used for the purpose of recovering coalbed methane for sale or use, shall then be deemed to be a coalbed methane well and shall comply with the provisions of this chapter at the time that the well is converted or used for the purpose of recovering coalbed methane for sale or use;
(6) “Commissioner” means the commissioner of the Department for Natural
Resources;
(7) “Correlative rights” means the reasonable opportunity of each person entitled to recover, without waste, the coalbed methane in and under his or her tract or tracts, or the equivalent thereof;
(8) “Department” means the Department for Natural Resources;
(9) “Director” means the director of the Division of Oil and Gas as established in
KRS § 353.530;
(10) “Drilling unit” means the maximum area in a pool which may be drained efficiently by one (1) well so as to produce the reasonable maximum recoverable coalbed methane in the area. Where the department has provided rules for the establishment of a drilling unit and an operator, proceeding within the framework of the rules so prescribed, has taken the action necessary to have a specified area established for production from a well, the area shall be a drilling unit;
(11) “Division” means the Division of Mine Permits in the Department for Natural
Resources;
(12) “Field rules” means rules established by orders of the review board relating to the drilling, completion, production of, and specifications for coalbed methane wells in a particular geographic area as defined by an order;
(13) “Gob” means the de-stressed zone associated with any full-seam extraction of coal that extends above and below the mined-out coalbed;
(14) “Gob well” means a well drilled or a vent hole converted to a well pursuant to this chapter which produces or is capable of producing coalbed methane for
sale or use, from a de-stressed zone associated with any full seam extraction of coal that extends above or below a mined-out coalbed;
(15) “Horizontally drill” or “horizontal drilling” means the intentional act of drilling a borehole, shaft, or hole, which deviates from vertical for the purpose of penetrating a coal seam to produce coalbed methane;
(16) “Mine licensee” means the mine licensee as defined in KRS § 352.010(1)(r); (17) “Mine permittee” means the permittee as defined in KRS § 350.010(21);
(18) “Nonparticipating working interest owner” means a coalbed methane owner or lessee of a tract included in a drilling unit who elects to share in the operation of the coalbed methane well on a carried basis by agreeing to have his or her proportionate share of the costs allocable to his or her interest charged against his or her share of production from the coalbed methane well;
(19) “Nonparticipating operator” means a nonparticipating working interest owner who is also the operator of the coalbed methane well;
(20) “Operator” means any owner of the right to drill, develop, operate, and produce coalbed methane from a pool and to appropriate the coalbed methane produced therefrom, either for himself or herself, or for himself, herself, and others; in the event there is no coalbed methane lease in existence with respect to the tract in question, the owner of the coalbed methane rights therein shall be considered as an “operator” to the extent of seven-eighths (7/8) of the coalbed methane in that portion of the pool underlying the tract owned by that owner, and as a “royalty owner” as to one-eighth (1/8) interest in that coalbed methane;
(21) “Other interested coalbed methane parties” means all working interest owners other than the operator, all royalty and overriding royalty interest owners or holders, and any other party who owns or holds a right or interest in a drilling unit, coalbed methane well site for which a drilling permit has been issued or is pending, and all associated equipment, facilities, infrastructure, and improvements;
(22) “Participating working interest owner” means a coalbed methane owner or lessee who elects to bear a share of the risks and costs of drilling, completing, equipping, operating, plugging, and abandoning a coalbed methane well equal to the proportion which the acreage in the drilling unit he or she owns or holds under lease bears to the total acreage of the drilling unit;
(23) “Participating operator” means a participating working interest owner who is also the operator of the coalbed methane well;
(24) “Person” means any person, corporation, association, partnership, limited liability company, receiver, governmental agency subject to this chapter, trustee, so-called common law or statutory trust, guardian, executor, administrator, or fiduciary of any kind, federal agency, state agency, city, commission, political subdivision of the Commonwealth, or any interstate body;
(25) “Plat” means a map, drawing, or print showing the location of a well; (26) “Review board” means the Coalbed Methane Well Review Board;
(27) “Royalty owner” means any owner of coalbed methane in place, or coalbed methane rights, to the extent that the owner is not an operator as defined in subsection (20) of this section;
(28) “Stimulate” means any action taken to increase the flow of coalbed methane, or the inherent productivity of a coalbed methane well, including but not limited to fracturing, shooting, acidizing, or waterflooding, but excluding cleaning out, bailing, or workover operations;
(29) “Surface owner” means the person in whose name the surface of the land is assessed for purposes of taxes imposed according to the property valuation administrator;
(30) “Unit” means any tract or tracts which the department has determined are underlaid by a pool or pools of coalbed methane and are not drilling units as defined in subsection (10) of this section;
(31) “Unitization” means the act of combining separately owned tracts or separate interests therein into a unit constituting all or some portion of a coalbed that produces or is capable of producing coalbed methane and the joint operation of that unit;
(32) “Unit operator” means the party designated in a pooling order to develop a unit by the drilling of one (1) or more coalbed methane wells;
(33) “Vent hole” means a borehole, shaft driven, or hole dug, drilled, deepened, converted or reopened, which is used for the purpose of releasing or venting coalbed methane to the atmosphere and not for the purpose of capturing or producing coalbed methane for sale or use;
(34) “Venting” means the act of releasing coalbed methane to the atmosphere;
(35) “Well” means any borehole, shaft driven, or hole dug, drilled, deepened, converted or reopened for the purpose of capturing or producing coalbed methane for sale or use; and
(36) “Workable coalbed” means:
(a) Any coalbed twenty-four (24) inches or more in thickness; (b) Any coalbed actually being operated commercially;
(c) Any coalbed that the department decides can be operated commercially, and the operation of which can reasonably be expected to commence within not more than ten (10) years; or
(d) Any coalbed that, from outcrop indication or other definite evidence, proves to the satisfaction of the department to be workable and, when operated, will require protection if wells are drilled through or into it.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 117, sec. 28, effective June 29, 2017. — Amended 2010 Ky. Acts ch. 24, sec. 1871, effective July 15, 2010. — Amended
2006 Ky. Acts ch. 241, sec. 7, effective July 12, 2006. — Amended 2005 Ky. Acts ch. 123, sec. 44, effective June 20, 2005. — Created 2004 Ky. Acts ch. 65, sec. 2, effective July 13, 2004.