Pennsylvania Mineral Owners Beware!

by Elizabeth Alford on December 17, 2017

Pennsylvania mineral owners…beware! The state has made it easier for oil and gas companies to take advantage of landowners.

Pennsylvania Bill Affects Mineral Owners Right to Negotiate

The Pennsylvania Fiscal Code contains a provision that will make it easier for oil and gas companies to restart old and expired leases, often without the willing consent of landowners.

Old wells dot the Pennsylvania countryside and the status of the leases is often unclear. One of the ways companies are staying in the game is to send a ‘payment’ for an old well to the mineral owner. By cashing the check, the owner might be agreeing to the company’s interpretation of their agreement and inadvertently restarting a lease.

The bill states that simple non-production isn’t enough to cancel a lease and that the lessor can waive their right to seek lease termination if he/she:

1) Accepts payment

2) Doesn’t object within 90 days of notification that drilling will commence

“Acceptance of royalty payment shall constitute acknowledgment of an existing lease with the operator.”

Mineral owners are being advised not to cash royalty checks on old or expired wells, without first talking to an attorney.

Read more here.

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