On January 18, 2016, West Virginia House Delegates Folk, McGeehan, Faircloth, Azinger, Wagner, Butler Ihle, Canterbury, Hill, J. Nelson and Kurcaba introduced House Bill 4037 which amends W.Va. Code §22C-9-7 titled Drilling Units and the Pooling of Interests in Drilling Units in Connection with Deep Oil or Gas Wells. In HB 4037, it is proposed that the following provision be added to the statute:
Notwithstanding any other provision of this code, the owner or lessor of subsurface oil or gas resources connected to a deep oil or gas well may not be required or compelled to integrate or unitize his or her interest with another owner’s interest or be required to permit extraction of that resource. No surface operations or disturbances to the surface of land in a drilling unit connected to a deep oil or gas well may occur without the written consent of the surface owner that approves the operations or disturbances: Provided, That nothing in this subsection may be applied retroactively to void a unitization agreement or order entered prior to the enactment of the provisions in this subsection.
According to the statement contained in the Bill, the purpose of HB 4037 is “to prohibit the state from requiring persons with oil or gas rights connected to deep oil or gas wells to involuntarily integrate their interests in a drilling unit and to require a surface owner’s consent for operations or disturbances to the surface of the land in a drilling unit.”
We will keep you posted as this Bill progresses through the House and will send a Client Alert as to the outcome of any votes. Leech Tishman’s Oil & Gas and Government Relations attorneys can be helpful if you wish to address impacts of this pending legislation on your business.
For more questions about this issue, please contact Leech Tishman’s Energy Practice Group here.
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