On Aug. 29, Hilcorp Energy Co. withdrew its long-pending application for well spacing units from proceedings before the Pennsylvania Department of Environmental Protection. The withdrawal marks an end to the unnecessarily protracted process by which Hilcorp sought to acquire an order establishing spacing units, and serves as yet another example of how Pennsylvania’s laws on pooling and unitization must be revisited to keep pace with advances made by the oil and gas industry and to ensure the protection of correlative rights and efficient production of oil and natural gas.

The DEP is statutorily empowered to issue spacing unit or integration orders for the joint development of contiguous lands. The Oil and Gas Conservation Law, 58 P.S. Section 401 et seq., provides as follows: “In the absence of voluntary integration, the commission, upon the application of any operator having an interest in the spacing unit, shall make an order integrating all tracts or interests in the spacing unit for the development and operation thereof and for the sharing of production therefrom.”

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