|Posted:||December 20, 2016 09:33 AM|
|From:||Senator Gene Yaw|
|To:||All Senate members|
|In the near future, I plan to re-introduce legislation requiring a Pugh Clause for natural gas development. This legislation was Senate Bill 145 of last session. The Pugh Clause essentially defines what happens to the portion of the acreage a person leased that does not either contain a well or is not included within a producing petroleum pool or unit.
Under current law, if a landowner has 300 acres and only 20% of it is included in a unit, the company would be able to tie up the remaining 80% by production after the primary lease expires even though there is no production on the remaining acreage. My language would release any land covered by a lease but not included in the unit.
By introducing this legislation, we are no longer allowing gas companies the option of drilling on a small portion of a landowners’ property to provide themselves additional years to utilize land. This will create a fair process for the landowners to either:
Introduced as SB141