Oil and gas industry eager for co-tenancy law

PARKERSBURG — The results should be almost immediate after a bill supported by the oil and gas industry and owner associations becomes law, a trade association officer said on Tuesday.

House Bill 4268, the Co-tenancy Modernization and Majority Protection Act passed by the Senate this weekend and sent to the governor, would allow a company to drill on land where at least three-quarters of the mineral owners agree, among other provisions, and only applies in situations where there are at least seven owners. The bill was supported by the oil and gas industry, which believes it will improve West Virginia’s competiveness.

An increase in drilling is anticipated soon after the bill becomes law, Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said.

“I think you’ll see an increase in drilling activity within the next few months,” Burd said.

The bill includes provisions that greatly expand the distances in which horizontal wells can be drilled.

Dissenting mineral owners receive the same royalties and royalties to owners who can’t be located will go into the Unknown and Unlocatable Interest Fund administered by the state treasurer, from where half would go to the reclamation of orphan wells and the other half to a fund for the Public Employees Insurance Agency.

The bill is supported by the West Virginia Oil and Natural Gas Association, West Virginia Farm Bureau, the Surface Owners Rights Association and the West Virginia Royalty Owners Association.

Companies are preparing for the bill to become law, Burd said.

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