| Gov. Jim Justice has signed a bill dealing with the rights of multiple owners on a single piece of property.|
“This co-tenancy law. will allow for oil and gas development while protecting the rights of surface, mineral and landowners,” Justice said.
The bill was originally called "forced pooling," and would have allowed post-production costs of drillers to be deducted from royalty checks, a measure widely supported by company lobbyists.
That was finally excluded from the legislation.
Some Democrats argued the bill still doesn’t do enough for the rights of those minority owners.
“This is about the love of money and power. This is about big out of state companies that don’t want to give people a fair shake,” said Senator Mike Romano, D-Harrison.
The bill, as it reads, is meant to deal with situations in which property has been divided many times over generations.
The bill would require 75 percent of those with rights on a single tract to approve drilling. Holdouts or those who can’t be located would still have some rights under the bill.
Non-consentors would have two options. They could receive a production royalty equal to the highest percentage royalty paid to one of the consenting parties. Or, they could opt to share in revenue and cost of development — essentially winding up as a participant.
Bills dealing with natural gas drilling and property rights have fallen apart many times over the years, either failing to balance the rights of the various players or being weighed down by a variety of inter-related issues.
The co-tenancy bill has been shepherded through the legislative process by both natural gas companies and a coalition of West Virginia land owners and mineral owners organizations.
Justice signed a bill denying post-production expenses on drilling projects. The bill was a response to a state Supreme Court reversal last year on the policy.
The Supreme Court had ruled last May that state law allows natural gas production companies to subtract “reasonable post-production expenses” from royalties it pays to people with royalties rights on drilling projects.