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
18included in an agreement.

1(b) Applicability.--

2(1) Subsection (a) shall apply to any unit formed after
3the effective date of this section.

4(2) This section shall only apply to lease interests in
5an unconventional reservoir.

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

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

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

21Section 2. This act shall take effect in 60 days.