There are about 500 nonproducing CBM wells on state trust lands, Lance said. The wells are spread across about 200 leases held by 35 operators.
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The board voted to limit lease extensions for inactive CBM wells on state lands to five years, with justification needed for further extensions.
Lance added that there are also a number of well operators who've fallen delinquent on royalties due from the wells to the State Lands and Investments office. He told the group that his department will start canceling leases if those past due royalties aren't paid by the end of this month.
Office Director Ryan Lance told a group of oil and gas industry representatives at a Jackson natural gas convention Thursday that his agency is issuing notices to operators of inactive and delinquent wells. Lance told the group that his department is no longer receiving royalties on many of the wells.
"We want you to know there's a possibility your interest could be extinguished if you don't do something," he said. "We've hit the day of reckoning and we need your help."
Lance's speech followed a policy change approved by the Wyoming Board of Land Commissioners in June.
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The notices tell operators they have a year to bring the inactive wells back into production and compliance. If operators decline or fail to do so, Lance said the department will cancel the permits and "go in and start cleaning it up."
Bruce Hinchey is president of the Petroleum Association of Wyoming. He said Thursday he couldn't argue with the state lands office's direction.
"If you need to shut in for a good reason, you can make an argument and they'll extend the lease," he said.
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JACKSON Wyoming's Office of State Lands and Investments could begin pulling coal bed methane permits soon in an attempt to force producers to restart a mass of nonproducing wells in the Powder River Basin.
It had been common for the board to approve suspensions 10 or 12 times for each well.
Coal bed methane production has declined with the waning price of natural gas in the United States. Many operators have idled their wells or asked for suspensions because attempting to produce simply wouldn't pay off. Lance said idle wells do the state no good.
"We've lived by the sword in coal bed methane production of the Powder River Basin," he said. "There is lots of open well bore. There is not adequate bonding. We're shipping product, but not getting paid royalty."
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Wyoming threatens to pull coal
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