Unconventional Drilling Drives Need for Improved Oil and Gas Records Management by Vickie Malis

As unconventional drilling increases in North America, so does a myriad of concerns having to do with critical title issues and legacy oil and gas records.

Some are easy to see coming.

A recent Reuters article reported that homebuilders and real estate developers are now selling properties and homes to buyers and retaining the mineral rights. But many of the homeowners are unaware that they are not buying the mineral rights, too. As a report from Reuters about the practice notes, In most states, sellers aren't legally required to disclose to home buyers whether they are severing the mineral rights to a property.

This has happened to angry homeowners in Texas, Colorado, North Carolina and Florida, all states rich in oil and natural gas. A major homebuilder has sold more than 10,000 home lots in Florida and kept the mineral rights. Needless to say, when a homeowner finds out, they are furious; and start thinking lawsuits.

The reasoning behind this is that these homes may now be exposed to toxic pollution, the property value may be dramatically reduced, selling it can be very difficult, and drilling could result in their inability to secure insurance.

While this type of practice may be legal, it also signals an onslaught of possible lawsuits when anything goes wrong related to unconventional drilling in populated areas.

For any company involved in unconventional drilling, a comprehensive records and information program that is consistently implemented across all departments, locations and partnerships is vital. A recent editorial in The Wall Street Journal, The Lawsuit Bayou, warned that in Louisiana, ..trial lawyers plumb property records and then sue energy companies for past drilling, alleging environmental degradation.

To protect against that and other actions, pipeline record keeping must be focused on title issues and land records.

These documents will be critical for profitable commercial activities that could be challenged in court. For companies involved in unconventional drilling, the better the oil and gas records and information management program, the less likely there is to be a legal contest and the more defensible their position is should litigation be pursued.

One way an oil and gas records and information management (RIM) program can help avoid these types of penalties and fines, is through consistent adoption and enforcement of policies across all departments, locations and with partner companies. Many oil and gas companies have strong RIM programs yet struggle with this level of consistent adoption and enforcement.

Iron Mountain is an expert record-keeping partner with decades of experience in the oil and gas industry. We service almost all of the super majors and 90 percent of the majors. If your organization is expanding through unconventional drilling, this is a great time to get a benchmark assessment of your oil and gas records management program and determine the risk mitigation coverage that it currently provides.

LINK:	http://blogs.ironmountain.com/2014/industry/energy-industry/unconventi...
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