PRINTER'S NO. 181
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY YAW AND BAKER, JANUARY 18, 2013
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JANUARY 18, 2013
1Amending the act of July 20, 1979 (P.L.183, No.60), entitled "An
2act regulating the terms and conditions of certain leases
3regarding natural gas and oil," adding definitions; providing
4for payment information to interest owners for accumulation
5of proceeds from production; and making editorial changes.
11[Section 1. A lease or other such agreement conveying the
12right to remove or recover oil, natural gas or gas of any other
13designation from lessor to lessee shall not be valid if such
14lease does not guarantee the lessor at least one-eighth royalty
15of all oil, natural gas or gas of other designations removed or
16recovered from the subject real property.]
17Section 2. The act is amended by adding sections to read:
18Section 1.1. Short title.
1Section 1.2. Definitions.
5"Check stub." The financial record attached to a check.
6"Division order." An agreement signed by an interest owner
7directing the distribution of proceeds from the sale of oil,
8gas, casing head gas or other related hydrocarbons. The order
9shall direct and authorize the payor to make payment for the
10products taken in accordance with the division order.
14"Mcf." A unit of measurement expressed by 1,000 cubic feet.
15Section 1.3. Royalty guaranteed.
16A lease or other such agreement conveying the right to remove
17or recover oil, natural gas or gas of any other designation from
18the lessor to the lessee shall not be valid if the lease does
19not guarantee the lessor at least one-eighth royalty of all oil,
20natural gas or gas of other designations removed or recovered
21from the subject real property.
22Section 3. Section 2 of the act is amended to read:
23[Section 2. An oil, natural gas or other designation gas
24well or oil, natural gas or other designation gas lease which
25does not provide a one-eighth metered royalty shall be subject
26to such an escalation when its original state is altered by new
27drilling, deeper drilling, redrilling, artificial well
28stimulation, hydraulic fracturing or any other procedure for
29increased production. A lease shall not be affected when the
30well is altered through routine maintenance or cleaning.]
3An oil, natural gas or other designation gas well or oil,
4natural gas or other designation gas lease which does not
5include a one-eighth metered royalty shall be subject to an
6escalation equal to one-eighth metered royalty when its original
7state is altered by new drilling, deeper drilling, redrilling,
8artificial well stimulation, hydraulic fracturing or any other
9procedure to increase production. A lease shall not be affected
10when the well is altered through routine maintenance or
12Section 4. The act is amended by adding sections to read:
13Section 3.1. Commencement of guaranteed royalty.
14Whenever a procedure to increase production has been
15completed prior to the effective date of this section, metering
16and the royalty required under section 1.3 or 2 shall commence
17within 90 days after the effective date of this section.
18Section 3.2. Payment information to interest owners.
19Whenever payment is made for oil or gas production to an
20interest owner, whether pursuant to a division order, lease,
21servitude or other agreement, all of the following information
22shall be included on the check stub or on an attachment to the
23form of payment, unless the information is otherwise provided on
24a regular basis:
25(1) A name, number or combination of name and number
26that identifies the lease, property, unit or well or wells
27for which payment is being made; and the county in which the
28lease, property or well is located.
29(2) Month and year of gas production.
30(3) Total barrels of crude oil or number of Mcf of gas
1or volume of natural gas liquids sold.
2(4) Price received per barrel, Mcf or gallon.
18Section 3.3. Accumulation of proceeds from production.
19(a) General rule.--Proceeds from production of oil and gas
20may be accumulated and remitted to the persons entitled thereto
21annually for the 12 months' accumulation of proceeds totaling
22less than $100.
23(b) Owner to be paid.--Notwithstanding any other provision
24of this section to the contrary, all accumulated proceeds shall
25be paid to the owner thereof when production ceases or upon
26relinquishment or transfer of the payment responsibility.
27Section 5. Section 4 of the act is amended to read:
28[Section 4. This act shall take effect in 60 days.]
29Section 4. Effective date.
30This act shall take effect in 60 days.
1Section 6. This act shall take effect in 60 days.