Rep. Jesse White (D-Washington) this week introduced a trio of House bills to protect landowners who lease property to natural gas and oil drillers in Pennsylvania, and help others obtain mineral rights that may exist under their property but are deemed abandoned.

Rep. White said Pennsylvania currently has no reporting requirements or standards for royalty payments, and that his bills promote simple best practices designed to increase transparency and accountability to benefit residents who have signed or are looking to sign leases to develop oil and gas resources.

House Bill 1442 would require companies to clearly show on royalty check stubs, payment forms, or other remittance, details of the well’s productivity and any deductions taken by the company, including the total amount of severance, production taxes or other deductions permitted under the lease.

The bill, known as the Leaseholder Royalty Reform and Disclosure Act, would also solidify the guaranteed minimum-metered royalty at one-eighth. The mandate would apply to older wells with a royalty below one-eighth in the event that the well's original state is altered to increase production.

The legislation is similar to Senate Bill 259 (Yaw-R-Lycoming), which unanimously passed the Senate, Rep. White said.

House Bill 1443 would mandate a “Pugh Clause” in gas and oil contracts to define what happens to the portion of acreage leased that either does not contain a well or is not included within a producing pool or unit, allowing landowners to remove this land from contract.

Without Pugh Clause language, landowners may have limited or no options to sell or re-lease their property, as it could be held indefinitely in limbo while yielding no income.

House Bill 1444 would provide a judicial process by which a property owner could petition the courts to have mineral rights rejoined with surface rights in instances when those mineral rights are deemed abandoned after a period of 10 years of non-use.

The bill, which is similar to legislation White introduced in previous sessions, would not take away mineral rights from any legitimate owner. Instead, it is designed for situations in which the owner cannot be determined after a lengthy title search and proper notification to all parties who may have a legal interest in the mineral rights.

“Signing a gas lease is undoubtedly one of the biggest decisions a family will make in their lifetime regarding their property,” White said. “Anyone who signs a lease deserves at the very least some basic and common sense protections under the law.

“To be clear, this legislative package would not cost leaseholders any money, but instead would guarantee that every penny they deserve is accounted for, while promoting natural gas development to provide opportunities for landowners, business and the local workforce alike.”

5/27/2013