1Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
2Statutes, providing for lease extended by production.

3The General Assembly of the Commonwealth of Pennsylvania
4hereby enacts as follows:

5Section 1. Title 58 of the Pennsylvania Consolidated
6Statutes is amended by adding a section to read:

7§ 3213.1. Lease extended by production.

8(a) Prohibition.--Any portion of land subject to a lease,
9which is combined with other lands or leases to form a unit,
10shall be subject to operations and production on and in the
11unit. The operations and production shall continue a lease in
12force and effect during or after the primary term according to
13the lease provisions only as to that portion of the leased land
14which is included in the unit. Any land covered by a lease and
15not included in the unit shall not be subject to operations or
16production on or in the unit. The lease may be kept in force in
17any manner provided in the lease agreement for leased land not

1included in an agreement.

2(b) Applicability.--

3(1) Subsection (a) shall apply to any unit formed after
4the effective date of this section.

5(2) This section shall only apply to lease interests in
6an unconventional reservoir.

7(c) Definitions.--As used in this section, the following
8words and phrases shall have the meanings given to them in this
9subsection unless the context clearly indicates otherwise:

10"Unconventional reservoir." A formation below the base of
11the Elk Sandstone or its geologic equivalent stratigraphic
12interval that contains or produces oil or gas that generally
13cannot be economically produced at flow rates or in volumes
14except by hydraulic fracturing, horizontal or multilateral well
15bores or other techniques to expose the reservoir to the well
16bore.

17"Unit." A consolidation of interests of persons actively
18engaged in the business of extracting oil or gas from land owned
19or leased by the persons within a defined geographic area to
20facilitate the drilling of wells from one or more unconventional
21reservoirs.

22Section 2. The addition of 58 Pa.C.S. § 3213.1 shall apply
23to contracts entered into on or after the effective date of this
24act.

25Section 3. This act shall take effect immediately.