Corbett Signs 2 New Laws to Aid Mineral Owners

Gov. Tom Corbett signed two pieces of legislation into law that will help provide leaseholders with more protection related to natural gas development in the Commonwealth, according to the Penn State Extension.

The first bill, Act 173 of 2014 known as the Unconventional Well Report Act, updates the reporting requirement for operators of unconventional wells from every six months to monthly.

The second bill, Act 152 of 2014 known as the Recording of Surrender Documents from Oil and Natural Gas Lease Act, requires lessees of oil and natural gas leases to file certain surrender documents with the recorder’s office once the lease expires.

Act 173 originated from a bill introduced by Rep. Tina Pickett (R-110). The bill’s focus is to allow greater transparency for landowners and to provide better understanding of production across the commonwealth.

According to the act, the first report is due March 31, 2015. Subsequent reports are due 45 days after the close of the reporting period.

While the act doesn’t specify, based on the timing, operators will report production from July 1 – Dec. 31 to the state Department of Environmental Protection (DEP) by Feb. 15, then start reporting monthly figures for January in March. All production figures will then be published on DEP’s Web site to allow for public access. The bill only applies to unconventional wells.

Monthly reporting will help landowners with more timely information to compare their royalty checks with production figures supplied to the DEP. Additionally, researches will have access to monthly figures to help better define decline curves, track monthly production for the various shale plays within the Commonwealth and help identify hot spots of production earlier. 

Picket also introduced the legislation that was signed into law as Act 152. The act is a mechanism for landowners to compel the lessee to file surrender documents upon the expiration, termination or cancellation of a lease.

This will help landowners and operators alike who wish to enter into new leases but the status of old leases is unclear. The act requires the lessee to provide the lessor a surrender document no more than 30 days at the expiration, cancellation or termination of the lease. Should the lessee fail to provide the surrender document the lessor may serve notice to the lessee requesting one be issued within timely fashion. 

Both bills passed the House and Senate unanimously.

Matt Henderson, Shale Gas Assets Manager, Penn State Marcellus Center for Outreach and Research (MCOR)