Natural Gas Forum For Landowners

Natural Gas/Oil Government Laws & Regulations => West Virginia => Topic started by: mmwv on February 15, 2017, 12:24:36 PM

Title: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on February 15, 2017, 12:24:36 PM
i wrote some things on LinkedIn about this...

https://www.linkedin.com/pulse/joint-development-matthew-miller-mba-cpl
https://www.linkedin.com/pulse/oil-gas-co-tenancy-west-virginia-matthew-miller-mba-cpl


(I was only slightly active on here, before being not at all active and apparently my account was deleted,not that I imagine anyone noticed. I am rather less anonymous than I was before, though.)
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on March 16, 2017, 10:44:12 AM
There is a new bill in the WV Senate Judiciary Committee dealing with Joint Development and Co-Tenancy.  I summarized the differences here:
https://www.linkedin.com/pulse/new-improved-joint-development-co-tenancy-bill-wv-miller-mba-cpl

It addresses Post-Production Costs, Surface Owner rights, and raises the required number of co-tenants signing on before a lease can be developed.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: claude on March 16, 2017, 12:33:32 PM
(I was only slightly active on here, before being not at all active and apparently my account was deleted,not that I imagine anyone noticed. I am rather less anonymous than I was before, though.)

i have found that the most active are in the gas industry rather than landowners.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: ghrit on March 16, 2017, 12:47:05 PM
(I was only slightly active on here, before being not at all active and apparently my account was deleted,not that I imagine anyone noticed. I am rather less anonymous than I was before, though.)

i have found that the most active are in the gas industry rather than landowners.
Claude-
Side issue, but admin purged the membership list some time back when overall activity dropped WAY off.  Glad you're back.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on March 17, 2017, 09:57:10 AM
I can see how industry folks might me more likely to be here... we have to think about this stuff everyday, so its going to be more interesting to us.

I wasn't sure how much traffic the place still got, but I know it has been valuable in the past for different people, so I figured I would sign back up.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: macal on March 17, 2017, 03:52:45 PM



  I guess all states have different laws. WV wants to force you into a unit?
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on March 20, 2017, 08:03:14 AM
The "Joint Development" provision would be similar to the bill that passed in PA in 2012, I think it was.  It basically said that if a lease is silent on pooling, that it can be pooled.

Its a bigger problem in WV than in PA.  We have entire jobs devoted to modifying old WV leases to add pooling because we are afraid of being sued if we pool them without the pooling clause.

What I thought folks on here might like is the provision in the new SB 576 which says that a gas company cannot pool leases without having a surface use agreement from the surface owners of any tracts which will have surface impacts.  As written, this gives surface tract owners a veto of any horizontal drilling...so I can't imagine that it will be accepted lightly by the industry.... but I am interested to see how it ends up.

And there is certainly some argument supporting that.... can a mineral owner really give a company permission to use your surface to develop third party tracts?  Could be hard on companies, though.

It also says that any leases which do not include pooling language but are pooled cannot have any post-production costs deducted and in event can the royalty be less than the 1/8th.

The most controversial part of the bill here is the ability to develop a lease with less than 100% of co-tenants having signed leases.  The current bill says we would need 2/3 of the owners on board, others are calling for 75%...
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on March 29, 2017, 08:35:42 AM
There were significant changes to SB 576 before it came out of committee.  I summarized them here: https://www.linkedin.com/pulse/sb-576-cotenancy-mineral-development-act-matthew-miller-mba-cpl

There are a number of amendments proposed to the bill, and the amendments and the bill itself will all be voted upon today in the Senate.  Its crossover day, so if the Senate doesn't send the bill to the House today, it is dead for the year.

Notably, nonconsenting mineral owners would have the right to elect to take a royalty or to participate as a working interest owner.  Surface Owners are to be paid a flat $100,000 well pad fee in addition to all other normal surface damage payments which are due.  PPC deductions are prohibited from leases pooled which do not explicitly allow pooling.  And more.

You can read the bill and the proposed amendments here:
http://wvlegislature.gov/Bill_Status/bills_History.cfm?input=576&year=2017&sessiontype=rs
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on March 30, 2017, 07:32:12 AM
The WV Senate passed SG 576 yesterday, after approving a few amendments on the floor.

The most notable change was the addition of an entire section which creates a Sliding Scale for Severance Taxes on Natural Gas.  The rate of the tax on gas would depend on the annualized price of gas, and would range from 4% up to 9%.

The bill clarifies that each surface tract impacted by a well pad is to be paid $100,000, indexed for to the CPI so it would increase with inflation.

The bill establishes the options of non-consenting cotenants to either take the highest royalty being paid to a consenting cotenant or to continue as a WI owner.

I tried to explain a bit about the bill here: https://www.linkedin.com/pulse/wv-senate-sends-joint-development-bill-house-matthew-miller-mba-cpl?trk=v-feed&lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BH95iT7MwKcgTGPT79gOpxw%3D%3D

It now goes to the House of Delegates, who must pass it by the last day of the session on April 8.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: macal on March 31, 2017, 06:25:18 AM



  I commend West Virginia for moving forward on different legislation regarding nat gas development. PA is just gridlocked with the Republicans doing nothing.
Title: Re: SB 244; Co-Tenancy and Joint Development
Post by: mmwv on April 05, 2017, 08:34:58 AM
Del. Bill Anderson, the chair of the House Energy Committee, has single-handedly killed SB 576.
Anderson has decided on his own that he will not let SB 576 advance out of the House Energy Committee. His stated justifications for not allowing the committee to vote are: (1) The full House debated the marijuana bill a few days ago and (2) the vote in the committee might be close.  Which are clearly non-reasons. 

We will have to wait to see what his real reasons for killing the bill were. 
But if it doesn't make it out of committee today, it is dead for the year. (The last day of the session is saturday, and bills have to be read three times (each on a different day) before the full house can vote yes or no.