1Amending the act of July 25, 1961 (P.L.825, No.359), entitled
2"An act defining and prohibiting waste in the production of
3oil and gas; defining the powers and duties of the Oil and
4Gas Conservation Commission and the Oil and Gas Division of
5the Department of Mines and Mineral Industries with respect
6to the prevention of waste in the production of oil and gas
7from certain geological horizons; the protection of
8correlative rights; the spacing of well drilling operations;
9the unitization of lands and horizons for the purpose of
10regulating well spacing; providing for the enforcement of
11this act; and the issuance of rules, regulations and orders
12prescribing the rights, obligations and duties of owners and
13operators of interests in lands and leasehold interests
14therein with respect to the drilling of oil and gas wells
15thereon; providing for hearings and the procedures to be
16followed therein; imposing duties upon the courts; providing
17methods for the enforcement of the provisions of this act,
18limiting all the provisions hereof to certain geological
19horizons; imposing penalties and making an appropriation,"
20further providing for definitions and for integration of
21interests in spacing units.

22The General Assembly of the Commonwealth of Pennsylvania
23hereby enacts as follows:

24Section 1. Sections 2(8) and 8(a) of the act of July 25,
251961 (P.L.825, No.359), known as the Oil and Gas Conservation
26Law, are amended to read:

1Section 2. Definitions.--As used in this act--

2* * *

3(8) "Royalty owner" means any owner of oil or gas in place,
4or oil or gas rights, subject to a lease covering such oil or
5gas in place or oil or gas rights. "Royalty owner" also means
6any owner of an interest in an oil or gas lease which entitles
7him to a share in the production of the oil or gas under such
8lease or the proceeds therefrom without obligating him to pay
9any costs under such lease. ["Royalty owner" also means the
10owner of any interest in the oil or gas in place, or oil or gas
11rights, who has not executed an oil and gas lease, to the extent
12that such owner is not designated an "operator" under the
13preceding clause.]

14* * *

15Section 8. Integration of Interests in Spacing Units.--(a)
16When two or more separately owned tracts are embraced within a
17spacing unit, or when there are separately owned interests in
18all or a part of a spacing unit, the interested persons may
19integrate their tracts or interests for the development and
20operation of the spacing unit. [In the absence of voluntary
21integration, the commission, upon the application of any
22operator having an interest in the spacing unit, shall make an
23order integrating all tracts or interests in the spacing unit
24for the development and operation thereof and for the sharing of
25production therefrom. The commission as part of the order
26establishing a spacing unit or units shall prescribe the terms
27and conditions upon which the royalty interests in the unit or
28units shall, in the absence of voluntary agreement, be deemed to
29be integrated without the necessity of a subsequent separate
30order integrating the royalty interests. Each such integration

1order shall be upon terms and conditions that are just and
2reasonable, and shall be made only after a public hearing after
3notice by certified mail to all other operators and royalty
4owners within the unit whose interests are of record, at least
5fifteen days prior to the date of the hearing, or in the
6alternative by personal service in the manner set out in
7subsection (d) of section 10. If such persons or their addresses
8are unknown to the applicant, notice may be given by the
9commission by publication for two successive weeks in a
10newspaper of general circulation in the county, or in each
11county if there be more than one, in which the lands embraced
12within the unit are situated. The first publication shall be at
13least fifteen days prior to the date of the hearing. Should the
14aforesaid notice fail to be given to any operator of record or
15royalty owner or should an attempt to give notice be held to be
16invalid, such defect shall not invalidate the proceedings at the
17hearing or any orders issued: Provided, however, That any such
18order shall not be effective as to the interest of the person
19whose interest is of record who was not notified or to whom
20notice is held to be invalid.]

21* * *

22Section 3. This act shall take effect in 60 days.