Oil and gas well operators often work to acquire new mineral rights and extract natural resources. Oil and gas well operations have the potential to be lucrative, but they also place numerous demands on business leaders.
Compliance with the law is of the utmost importance in the oil and gas sector, as mistakes and omissions can impact a company’s finances and future operations. There are many different compliance issues that can arise when managing oil and gas wells, with the three below being among the most pressing and common.
1. Employment law compliance
The oil and gas sector is known for being relatively dangerous for professionals. Whether a company relies on direct-hire employees or independent contractors, proper adherence to safety regulations is of the utmost importance. Companies can also face challenges related to how they classify their workers and even their payroll practices.
2. State reporting compliance
Every year, the Texas Railroad Commission receives annual reports from oil and gas businesses. Every company working in the extraction sector must submit the annual report no later than April 1st annually.
3. Environmental compliance
There are state, federal and sometimes even local environmental regulations that govern oil and gas businesses. From verifying whether operations might impact endangered species to properly handling waste, there are many compliance issues that can lead to operational setbacks or financial penalties.
Partnering with an attorney familiar with oil and gas well operations is one of the most effective ways for entrepreneurs funding new startups and those stepping into an executive role to better ensure their compliance with all relevant regulations. Proactive compliance can help ensure the stability of a company’s finances and operations.