D.Colo.: Landowners consented to entries by BLM when leasing to oil and gas companies

The Court affirms the “Interior Board of Land Appeals’ finding that the Federal Oil and Gas Management Act authorizes Bureau of Land Management representatives to conduct warrantless, unannounced inspections of oil wells on Plaintiffs’ fee lands was not arbitrary, capricious, or otherwise contrary to law.” The landowners effectively consented in their leases to the oil and gas companies. Maralex Resources, Inc. v. Jewell, 2017 U.S. Dist. LEXIS 205461 (D. Colo. Oct. 19, 2017) (see Treatise § 12.32):

In leasing their interests to Maralex, the O’Hares gave Maralex the right to enter their property as reasonably necessary to develop the mineral estate. See Entek GRB, LLC v. Stull Ranches, LLC, 885 F. Supp. 2d 1082, 1088 (D. Colo. 2012). Maralex, in turn, committed this lease to the CA. (AR at 26-29.) It agreed to the BLM’s supervision over all operations subject to the agreement, including those on the O’Hares’ lands. (Id. at 30.) The BLM, by statute and regulation, has the same right to enter the land as Maralex, the lease owner. See 30 U.S.C. § 1718(c).

The IBLA recognized that the BLM’s authority to inspect wells on the O’Hares’ land subject to the CA was limited to “‘site security, measurement, reporting of production and operations, and assessments or penalties for noncompliance with such requirements.’” (AR at 479 (quoting 43 C.F.R. § 3161.1(b)).) There is no evidence that the BLM ever sought, or was granted, access to the O’Hares’ property for any purpose other than to conduct these limited inspections.

Further, the record does not show the BLM seeks, or has been granted by the IBLA, the authority to inspect the Katie Eileen Wells other than in accordance with the regulations. The regulations expressly state that “[i]nspections normally will be conducted during those hours when responsible persons are expected to be present at the operation being inspected.” 43 C.F.R. § 3162.1(b).

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