On September 16, 2013, three bills were introduced to the
House of Representatives for the Pennsylvania General Assembly that would amend
the act of July 20, 1979 (P.L. 183, No. 60), known as the Oil and Gas Lease
Act, added July 9, 2013 (P.L. 473, No. 66). They were each forwarded to the
House Environmental Resources and Energy Committee.
House
Bill 1650 proposes amended language under the Oil and Gas Lease Act that
deals with information that well operators are required to supply to
landowners. HB 1650 includes definitions for “affiliated parties” under the
Act, and also included more detailed requirements for reporting the calculation
of royalties and deductions under the Act. The Bill was introduced by
Representative White.
House
Bill 1684 proposes amended language under the Oil and Gas Lease Act that
would prohibit the deduction of severance or other production taxes when
calculating royalties. Additionally, it proposed a Construction sub-section
that would prevent the Act from being interpreted to preclude enforcement of
leases that guaranteed lessor’s a greater than one eighth royalty under the
first marketable product doctrine. The Bill was introduceds by Representative
Everett.
Lastly, House
Bill 1700 proposes amended language under the Oil and Gas Least Act that
states the function of “multiple contiguous leases” in the language added as a
result of Act 66 of 2013. The bill provides:
“In cases where an
operator has the right to develop multiple contiguous leases separately and
proceeds to develop the leases jointly when not expressly permitted by the
leases, the leases may be declared null and void at the lessor’s discretion and
may be renegotiated at the lessor’s discretion.”
The language would also clarify that forced pooling or
unitization, as defined, was not implemented by the Act. The Bill was
introduced by Representative White.
Written by: Garrett Lent, Research Assistant
Agricultural Law Resource and Reference Center
September 2013
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