|Posted:||April 24, 2013 12:40 PM|
|From:||Representative Jesse White|
|To:||All House members|
|Subject:||Reporting Standards for Marcellus/Utica Shale Royalty Checks and Guaranteed Minimum Royalties|
|In the future I will be introducing legislation designed to provide clarity and protection to leaseholders receiving royalties from oil and gas leases in the Marcellus and Utica Shale. Pennsylvania currently has no reporting requirements or standards, leaving leaseholders confused about deductions from their royalty checks. Similar to SB 259, which passed the Senate unanimously, my legislation would require companies producing natural gas to show on each check stub, attachment to a payment form, or other remittance advice:
• A name, number, or combination of name and number that identifies the lease, property, unit or well or wells for which payment is being made;
• the county in which the lease, property or well is located;
• the month and year of gas production;
• total of barrels of crude oil or number of MCF of gas or volume of natural gas liquids sold;
• price received per barrel, MCF or gallon;
• total amount of severance and other production taxes and other deductions permitted under the lease, with the exception of the windfall profit tax;
• the net value of total sales after deductions;
• the owners’ interest in sales from the lease, property, or well expressed as a decimal or fraction;
• interest owners’ share of the total value of sales prior to deductions;
• interest owners’ share of the sales value less the interest owners’ share of taxes and deductions; and
• contact information, including an address and telephone number.
My legislation would also set the guaranteed minimum metered royalty at one-eighth (as is current practice in PA), which would also apply to older wells with a royalty below one-eighth in the event the well's original state is altered by new drilling, deeper drilling, redrilling, artificial well stimulation, hydraulic fracturing or any other procedure to increase production (not including maintenance).
This legislation is a simple best practice designed to increase transparency and accountability to benefit Pennsylvanians who have signed leases to develop their oil and gas resources, and I urge the co-sponsorship and support from the General Assembly.
Introduced as HB1442