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Pennsylvania Bill Affects Mineral Owners Right to Negotiate

by Elizabeth Alford on September 14, 2017

Pennsylvania legislators are considering a bill that threatens longstanding principles of property law that could hinder mineral rights owners.

North Dakota’s Complex Mineral Rights Issues

Last week, the Pennsylvania House of Representatives passed HB 453, a budget bill with a provision in a Pennsylvania that might make it harder for landowners with depleted oil and gas wells to negotiate more lucrative terms.

Property law in the state has long held that oil and gas leases expire automatically when wells stop flowing. The bill allows companies to bring old leases back to life by defining the period of non-production as temporary.

Section 1610 of the budget bill establishes a new general rule: Landowners waive their right to try to terminate a lease after it stopped producing oil or gas if — before they claimed the lease had expired — a company either restarted production from the lease and the landowner accepted a royalty payment, or a company drilled a new well on the lease after giving the landowner three months to object.

The bill has the potential to have far-reaching impact for thousands of owners with old wells that may have been sidelined for years. Some fear the legislation eliminates landowners’ bargaining power and invites litigation.

The Fiscal Code bill is currently being debated in the Senate.

Read more at www.legis.state.pa.us

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