BEFORE THE VIRGINIA GAS AND OIL BOARD - APPLICANT: Keyrock Energy, LLC - DOCKET NO: VGOB 25-0218-4302

VIRGINIA DEPARTMENT 

OF ENERGY:

BEFORE THE VIRGINIA GAS AND OIL BOARD

APPLICANT:  

Keyrock Energy, LLC

DIVISION OF GAS AND OIL 

DOCKET NO: 

VGOB 25-0218-4302

RELIEF SOUGHT: Creation of sealed gob drilling unit and Pooling

LOCATION: See “Exhibit A"

UNIT NUMBER: 

Keyrock DM 26 Blue Jay #1

IN DICKENSON COUNTY, 

VIRGINIA

HEARING DATE:

February 18, 2025

PLACE:

Virginia Dept. of Energy

3405 Mountain Empire Rd.

Big Stone Gap, VA 24219

 TIME: 10:00 a.m.

RESPONDENTS: UNKNOWN

NOTICE OF HEARING

    COMMONWEALTH OF VIRGINIA: To all persons owning or claiming an interest in oil and gas, coalbed methane gas, coal, or other minerals and to all other persons who have or claim to have an interest in the coalbed methane underlying and within the Keyrock Energy, LLC Unit Keyrock DM 26 Blue Jay #1 and the lands described on “Exhibit A" to the Application, which is attached to this Notice, in the Kenady District of Dickenson County, Virginia (hereinafter "Subject Lands") and adjacent lands, and in particular to the following persons, their known and unknown heirs, executors, administrators, devisees, assigns and successors, both immediate and remote:

     NOTICE IS HEREBY GIVEN that Applicant is requesting that the Virginia Gas and Oil Board (hereinafter "Board") issue an order creating a sealed gob unit and pooling all the rights, interests, and estates of the above-named persons pursuant to Virginia Code Ann. § 45.2-1600, et seq., in regard to the drilling, development, and production of coalbed methane gas from said drilling Unit Keyrock DM 26 Blue Jay #1  containing approximately 444.83 acres +/-, for the mined-out Lower Banner Coal Seam (hereinafter "Subject Formation"). Applicant requests that the Board issue an order providing as follows:

     a) Creating a sealed gob drilling unit consisting of 444.83 +/- acres for the drilling, development, and production of coalbed methane gas from the sealed gob and the Subject Formation, which drilling unit is further described and depicted in "Exhibit A" annexed hereto and which drilling unit is described as follows: BEGINNING at a point having Virginia State Plane NAD 83 South Zone grid coordinates of: N 3,584,538.89 and E 10,306,909.86; thence N 62°26'30" E a distance of 1523.49' to a point; thence N 62°45'15" E a distance of 1405.29' to a point; thence S 67°30'25" E a distance of 86.94' to a point; thence N 61°30'55" E a distance of 124.80' to a point; thence N 68°42'20" W a distance of 42.81' to a point; thence N 38°35'11" W a distance of 66.55' to a point; thence N 25°45'41" W a distance of 65.28' to a point; thence S 62°41'15" W a distance of 91.15' to a point; thence S 54°02'30" W a distance of 70.81' to a point; thence S 62°31'16" W a distance of 576.03' to a point; thence N 27°18'34" W a distance of 299.19' to a point; thence N 62°43'28" E a distance of 645.56' to a point; thence N 25°44'38" W a distance of 53.88' to a point; thence N 62°09'25" E a distance of 407.30' to a point; thence N 62°47'51" E a distance of 577.46' to a point; thence S 27°26'10" E a distance of 471.21' to a point; thence S 62°29'19" W a distance of 269.84' to a point; thence S 16°21'35" W a distance of 109.51' to a point; thence S 27°16'14" E a distance of 425.84' to a point; thence N 77°24'06" E a distance of 62.19' to a point; thence N 18°53'44" E a distance of 67.29' to a point; thence N 69°41'47" E a distance of 32.35' to a point; thence N 27°24'19" W a distance of 183.98' to a point; thence N 44°09'35" E a distance of 18.97' to a point; thence N 61°08'59" E a distance of 237.88' to a point; thence S 27°24'19" E a distance of 67.99' to a point; thence N 59°43'15" E a distance of 79.77' to a point; thence S 27°24'19" E a distance of 64.99' to a point; thence N 61°51'15" E a distance of 77.35' to a point; thence N 63°58'50" E a distance of 82.69' to a point; thence S 26°33'00" E a distance of 67.00' to a point; thence N 62°13'41" E a distance of 404.96' to a point; thence S 28°14'41" E a distance of 408.25' to a point; thence S 61°59'07" W a distance of 93.99' to a point; thence S 17°33'25" E a distance of 103.55' to a point; thence S 73°14'24" E a distance of 83.45' to a point; thence S 20°49'24" E a distance of 26.17' to a point; thence N 63°29'23" E a distance of 67.03' to a point; thence S 27°12'39" E a distance of 270.12' to a point; thence S 27°24'19" E a distance of 98.89' to a point; thence S 27°05'11" E a distance of 359.18' to a point; thence S 27°11'41" E a distance of 816.25' to a point; thence S 62°56'03" W a distance of 467.75' to a point; thence N 28°39'00" W a distance of 84.74' to a point; thence S 62°24'40" W a distance of 151.99' to a point; thence S 67°12'40" W a distance of 112.03' to a point; thence S 59°56'29" W a distance of 148.84' to a point; thence S 62°00'56" W a distance of 175.94' to a point; thence S 27°53'09" E a distance of 98.40' to a point; thence N 73°21'25" E a distance of 15.10' to a point; thence S 27°28'36" E a distance of 600.45' to a point; thence S 60°09'58" W a distance of 15.83' to a point; thence S 25°59'45" E a distance of 71.81' to a point; thence N 81°38'39" E a distance of 166.00' to a point; thence N 12°06'30" E a distance of 77.27' to a point; thence N 62°20'41" E a distance of 457.73' to a point; thence N 62°29'12" E a distance of 502.20' to a point; thence N 62°50'59" E a distance of 449.19' to a point; thence N 62°08'34" E a distance of 443.98' to a point; thence S 28°16'04" E a distance of 407.83' to a point; thence S 22°02'52" E a distance of 64.16' to a point; thence S 07°28'42" E a distance of 104.49' to a point; thence S 03°26'30" E a distance of 67.69' to a point; thence S 74°06'15" E a distance of 87.77' to a point; thence S 27°15'55" E a distance of 1208.35' to a point; thence S 61°02'13" W a distance of 363.81' to a point; thence S 67°25'34" W a distance of 192.68' to a point; thence S 61°43'18" W a distance of 225.88' to a point; thence S 62°19'29" W a distance of 265.28' to a point; thence S 65°24'33" W a distance of 283.80' to a point; thence N 27°24'19" W a distance of 60.99' to a point; thence S 66°17'56" W a distance of 199.27' to a point; thence S 63°36'34" W a distance of 470.42' to a point; thence N 27°46'04" W a distance of 158.02' to a point; thence S 62°53'26" W a distance of 336.57' to a point; thence N 27°24'19" W a distance of 87.99' to a point; thence S 64°56'24" W a distance of 46.12' to a point; thence S 27°24'19" E a distance of 13.00' to a point; thence S 62°35'41" W a distance of 18.00' to a point; thence N 27°24'19" W a distance of 13.00' to a point; thence S 64°31'22" W a distance of 66.11' to a point; thence S 57°23'14" W a distance of 65.26' to a point; thence N 26°44'48" W a distance of 86.99' to a point; thence S 74°51'18" W a distance of 173.01' to a point; thence S 10°17'02" W a distance of 71.55' to a point; thence S 61°58'16" W a distance of 226.27' to a point; thence N 36°24'00" W a distance of 62.62' to a point; thence S 62°49'06" W a distance of 256.22' to a point; thence N 42°25'34" W a distance of 64.42' to a point; thence S 63°16'08" W a distance of 84.99' to a point; thence N 30°53'31" W a distance of 82.20' to a point; thence N 25°39'06" W a distance of 196.03' to a point; thence N 26°30'42" W a distance of 116.89' to a point; thence S 63°29'18" W a distance of 439.53' to a point; thence N 26°03'48" W a distance of 342.96' to a point; thence N 63°30'05" E a distance of 160.98' to a point; thence N 26°09'35" W a distance of 146.78 'to a point; thence S 60°37'18" W a distance of 10.72' to a point; thence N 27°42'35" W a distance of 196.51' to a point; thence S 62°35'41" W a distance of 66.99' to a point; thence N 27°59'09" W a distance of 221.13' to a point; thence N 27°36'40" W a distance of 114.23' to a point; thence S 62°23'20" W a distance of 232.80' to a point; thence S 62°25'28" W a distance of 504.43' to a point; thence N 27°33'41" W a distance of 392.53' to a point; thence N 24°54'50" W a distance of 117.90' to a point; thence S 62°54'28" W a distance of 183.02' to a point; thence N 25°06'27" W a distance of 82.00' to a point; thence N 42°35'31" W a distance of 48.92' to a point; thence N 27°24'19" W a distance of 18.00' to a point; thence N 15°36'56" W a distance of 48.19' to a point; thence S 63°46'34" W a distance of 97.01' to a point; thence N 23°41'34" W a distance of 195.99' to a point; thence N 27°59'33" W a distance of 116.16 'to a point; thence S 62°48'37" W a distance of 265.97 'to a point; thence S 45°28'49" W a distance of 23.85' to a point; thence S 72°26'09" W a distance of 52.77' to a point; thence S 62°16'42" W a distance of 362.04' to a point; thence N 28°44'09" W a distance of 147.92' to a point; thence N 44°26'20" W a distance of 51.23' to a point; thence N 28°01'17" W a distance of 294.93' to a point; thence S 63°17'07" W a distance of 91.94' to a point; thence N 27°09'23" W a distance of 340.62' to a point; thence N 62°51'15" E a distance of 88.11' to a point; thence N 27°26'09" W a distance of 166.09' to a point; thence N 26°51'09" W a distance of 119.92' to a point; thence N 22°57'41" W a distance of 141.89' to a point; thence S 62°35'41" W a distance of 10.00' to a point; thence N 21°17'38" W a distance of 81.45' to a point; thence S 62°16'42" W a distance of 180.98' to a point; thence N 29°23'52" W a distance of 146.90' to a point; thence N 23°53'13" W a distance of 193.18' to a point; thence N 34°45'12" W a distance of 91.84' to a point; thence N 25°10'11" W a distance of 143.51' to a point; thence S 61°57'54" W a distance of 90.99' to a point; thence N 26°56'20" W a distance of 339.87' to a point; which is the point of BEGINNING, containing 444.83 acres more or less.

       b) The pooling of interests of Respondents named in Exhibit B herein, and their known and unknown heirs, executors, administrators, devisees, trustees, assigns, and successors, both immediate and remote, for the drilling, development, and production of coalbed methane gas from the subject drilling unit for the Subject Formation underlying and comprised of the Subject Lands; 

    c)  Establishing the percentages for division of interest for production, revenue, and costs for all Respondents in accordance with those percentages as are set forth in “Exhibit B".

    d)  Designating Keyrock Energy, LLC, as Unit Operator; providing that the operator shall have the right to drill, develop, produce, market, and sell coalbed methane gas from the subject drilling unit; granting the operator the right to market and sell the coalbed methane gas from the subject drilling unit which is attributable to the conflicting claims and interests pooled herein; providing that the operator shall have an operator's lien on the coalbed methane gas estate and rights owned or claimed by the persons named herein in the subject drilling unit; and granting the operator the right to drill at any legal or specially permitted location on subject drilling unit; and granting the operator the right to drill wells at any legal or specially permitted location on the subject drilling unit.

    e) Making any necessary provisions for the escrow of funds pursuant to Va. Code Ann. §§ 45.1-361.21 and 45.1-361.22.

      f)  Providing that the order to be entered herein shall expire two (2) years from the date of its issuance if operations have not commenced by said date; but further providing that if operations have commenced during said two-year period, then said order shall remain in effect for so long as operations continue on the subject unit. However, in the event an appeal is taken from the order issued, the time between the mailing of the notice of appeal and the final order of the Circuit Court shall be excluded in calculating the two-year period referred to herein.

    g) With respect to separately owned tracts and separately owned interests in the unit, joining all the interests within the unit for the production of coalbed methane gas so that each owner in the unit will share in all production and costs regarding the unit in the proportion that the acreage owned by each owner bears to the entire acreage in the unit.

     h) Providing that operations under and in accordance with this order shall be regarded and considered as development, operation and production upon all lands included within the subject   unit. Production from any well(s) drilled on, operated, or produced from any part of the   unit, no matter where located, shall for all purposes be regarded as production from each separately-owned tract within the subject unit. The portion of production produced from and attributed to the unit and any separately owned tract therein, shall be deemed for all purposes to have been actually produced from such unit and tract, and development, exploration, or production operations with respect to any portion of the unit shall be deemed for all purposes to be the conduct of such operations for the production of gas from each separately owned tract in said unit.

      i) The Respondents listed in “Exhibit D" are lessors of the Applicant. They are joined as Respondents hereto only with regard to the creation of the sealed gob unit described in “Exhibit A". Their joinder as Respondents is necessary because the leases in question do not contemplate a unit of the size requested herein. This Application does not seek to pool leased interests in the unit on a compulsory basis, said interests are to be voluntarily pooled in the unit to be created herein. Therefore, any order entered herein need not afford leased parties, the Respondents identified at “Exhibit D", election options.

   j) Amending all prior Board Pooling Orders entered with regard to those units located within the subject unit to provide that the terms of the Order to be entered herein shall govern and control the allocation of production, revenue and costs for all purposes on and after midnight of the day on which the construction of the seals to isolate the mine works shown on Exhibit L and within the Subject Drilling Unit is completed.

    k)  Granting such other relief as is merited by the evidence and is just and equitable, whether or not such relief has been specifically requested herein.

  NOTICE IS FURTHER GIVEN that this cause has been set for hearing and the taking of evidence before the Board at 10:00 AM, on February 18, 2025, at the offices of the Virginia Department of Energy at 3405 Mountain Empire Road, Big Stone Gap, VA 24219, and that notice will be published as required by law and the rules of the Board.

  NOTICE IS FURTHER GIVEN that you may attend this hearing, with or without an attorney, and offer evidence or state any comments you have. For further information or a copy of the application and exhibits, either contact the Virginia Gas and Oil Board, State Oil and Gas Inspector, Virginia Department of Energy, Division of Gas and Oil, 3405 Mountain Empire Road, Big Stone Gap, Virginia 24219, or the Applicant at the address shown below.

Dated:  January 8, 2025

Keyrock Energy, LLC

Applicant

By:        

  Morgan Pate, Geologist

  Keyrock Energy, LLC 

  207 East Main St.,

Suite 2-D

  PO Box 2223

  Johnson City, TN 37605 

CERTIFICATE OF SERVICE

     I, Freddie E. Mullins, counsel for Keyrock Energy, LLC, hereby certify that I have on this 16th day of January, 2025, caused the foregoing notice and application to be served upon the parties listed herein, at their address, by certified mail, return receipt requested. 

Freddie E. Mullins

1-29-1t