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