PRIOR PRINTER'S NO. 181
PRINTER'S NO. 341
THE GENERAL ASSEMBLY OF PENNSYLVANIA
INTRODUCED BY YAW, BAKER, FONTANA, RAFFERTY, FOLMER, VOGEL, WAUGH, BROWNE, McILHINNEY AND VULAKOVICH, JANUARY 18, 2013
AS AMENDED ON THIRD CONSIDERATION, FEBRUARY 4, 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.
19This act shall be known and may be cited as the Oil and Gas
2Section 1.2. Definitions.
6"Check stub." The financial record attached to a check.
7"Division order." An agreement signed by an interest owner
8directing the distribution of proceeds from the sale of oil,
9gas, casing head gas or other related hydrocarbons. The order
10shall direct and authorize the payor to make payment for the
11products taken in accordance with the division order.
15"Mcf." A unit of measurement expressed by 1,000 cubic feet.
16Section 1.3. Royalty guaranteed.
17A lease or other such agreement conveying the right to remove
18or recover oil, natural gas or gas of any other designation from
19the lessor to the lessee shall not be valid if the lease does
20not guarantee the lessor at least one-eighth royalty of all oil,
21natural gas or gas of other designations removed or recovered
22from the subject real property.
23Section 3. Section 2 of the act is amended to read:
24[Section 2. An oil, natural gas or other designation gas
25well or oil, natural gas or other designation gas lease which
26does not provide a one-eighth metered royalty shall be subject
27to such an escalation when its original state is altered by new
28drilling, deeper drilling, redrilling, artificial well
29stimulation, hydraulic fracturing or any other procedure for
30increased production. A lease shall not be affected when the
1well is altered through routine maintenance or cleaning.]
4An oil, natural gas or other designation gas well or oil,
5natural gas or other designation gas lease which does not
6include a one-eighth metered royalty shall be subject to an
7escalation equal to one-eighth metered royalty when its original
8state is altered by new drilling, deeper drilling, redrilling,
9artificial well stimulation, hydraulic fracturing or any other
10procedure to increase production. A lease shall not be affected
11when the well is altered through routine maintenance or
13Section 4. The act is amended by adding sections to read:
14Section 3.1. Commencement of guaranteed royalty.
15Whenever a procedure to increase production has been
16completed prior to the effective date of this section, metering
17and the royalty required under section 1.3 or 2 shall commence
<-18within 90 days after the effective date of this section after
19December 17, 1979.
20Section 3.2. Payment information to interest owners.
21Whenever payment is made for oil or gas production to an
22interest owner, whether pursuant to a division order, lease,
23servitude or other agreement, all of the following information<-,
24at a minimum, shall be included on the check stub or on an
25attachment to the form of payment, unless the information is
26otherwise provided on a regular basis:
27(1) A name, number or combination of name and number
28that identifies the lease, property, unit or well or wells
29for which payment is being made; and the county in which the
30lease, property or well is located.
1(2) Month and year of gas production.
4(4) Price received per barrel, Mcf or gallon.
20Section 3.3. Accumulation of proceeds from production.
21(a) General rule.--Proceeds from production of oil and gas
22may be accumulated and remitted to the persons entitled thereto
23annually for the 12 months' accumulation of proceeds totaling
24less than $100.
25(b) Owner to be paid.--Notwithstanding any other provision
26of this section to the contrary, all accumulated proceeds shall
27be paid to the owner thereof when production ceases or upon
28relinquishment or transfer of the payment responsibility.
29Section 5. Section 4 of the act is amended to read:
30[Section 4. This act shall take effect in 60 days.]
1Section 4. Effective date.
2This act shall take effect in 60 days.
3Section 6. This act shall take effect in 60 days.