At a meeting of the Lewisville Local Government Corporation tonight, the board voted to protest natural gas operator Titan Operating's rule 37 exemption request with the Texas Railroad Commission. The board, consisting of the Mayor and four City Council members, also authorized the City Attorney to retain outside counsel to represent the city.
Titan had requested the rule 37 spacing exemption for numerous properties in Southern Lewisville in a strip just East of South Valley Parkway, South of Corporate Drive, extending through the Tom Thumb property along F.M. 3040. State rules set by the Texas Railroad Commission require that gas wells be drilled at least 330' from the property lines of un-leased mineral owners. But when operators get enough leases to get a majority of mineral rights, they can apply for an exception that allows drilling as close as 1 foot from a property line.
Opponents of rule 37 exemptions say that they basically allow gas operators to steal the property owner's natural gas without compensation.
As part of the rule 37 exception request, Titan had to file a list of property owners and the addresses they used when serving notice. The RRC also requires that the operator has made a good faith effort to lease the mineral rights.
In Titan's case, their RRC request's certificate of service lists the Lewisville property under the water tower at the corner of Valley Parkway and Cassion as being served to "City of Lewisville, S. Valley Pkwy." The correct address to send to would have been Lewisville City Hall. City officials were unaware of the pending action until an alert resident notified them last week.
Other mailing addresses listed in the certificate of service did not match the owner of record's mailing address as listed in Denton County tax records. According to state records, Lewisville resident Mark Fukuda, another owner on the service list filed a protest to the request on December 12th. The city and other residents on the list have until December 30th to file a protest.
Lewisville's mineral rights were transferred in 2004 to the Lewisville Local Government Corporation, a non-profit local government corporation formed to deal with mineral rights leasing for city property. The LGC will pay for the legal costs of fighting the rule 37 exception.
As far as we can tell, the RRC has not set a hearing date, but we'll update this if we find out when it is.
Update: Attached the City of Lewisville's protest.
The RRC has updated the protest deadline to January 19th, since some of the notices given by Titan were mailed to incorrect addresses.
Randall's Food and Drug (Owner of Tom Thumb) has also filed a protest.