S0694B1191A03308 AJB:EJH 10/21/19 #90 A03308
AMENDMENTS TO SENATE BILL NO. 694
Sponsor: REPRESENTATIVE METCALFE
Printer's No. 1191
Amend Bill, page 1, lines 1 and 2, by striking out all of
said lines and inserting
Amending the act of July 20, 1979 (P.L.183, No.60), entitled "An
act regulating the terms and conditions of certain leases
regarding natural gas and oil," providing for cross unit
drilling for unconventional wells.
Amend Bill, page 1, lines 5 through 18; page 2, lines 1
through 21; by striking out all of said lines on said pages and
inserting
Section 1. The act of July 20, 1979 (P.L.183, No.60), known
as the Oil and Gas Lease Act, is amended by adding a section to
read:
Section 2.2. Cross unit drilling for unconventional wells.
(a) General rule.--If an operator has the right to drill an
oil or gas well on separate units, the operator may drill and
produce a well that traverses, by horizontal drilling, more than
one unit, if:
(1) The operator reasonably allocates production from
the well to or among each unit the operator reasonably
determines to be attributable to each unit. The operator may
allocate production on an acreage basis for multiple units
provided the allocation has a reasonable correlation to the
portion of the horizontal wellbore in each unit.
(2) The traversing well is not expressly prohibited by
the terms of a lease.
(b) Location requirement.--The 330-foot location requirement
in section 6 of the act of July 25, 1961 (P.L.825, No.359),
known as the Oil and Gas Conservation Law, shall not apply to
unit lines traversed by a conservation well.
(c) Construction.--Nothing in this subsection shall be
construed to:
(1) authorize an operator to drill an oil or gas well
that is not subject to a valid lease or royalty agreement;
and
(2) automatically expand or diminish the current surface
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rights of an operator to include operations related to any
existing unit or any well drilled between existing units.
Section 2. This act shall take effect in 60 days.
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See A03308 in
the context
of SB0694