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Resources

PostHeaderIconURGENT ACTION NEEDED!

URGENT ACTION NEEDED NOW!!

Today at 3:00 p.m. the house Energy Committee with be discussing the forced pooling bill 4558.  Please take a moment to contact the members of the house Energy Committee listed below.

This bill has to potential to be devastating to royalty owners by allowing deductions to be taken from any lease/modification allowed by the Oil and Gas Committee.  As most of you may know 12.5% is not even close to the national average (18% according to NARO) and by not specifically addressing post production deductions it has the potential to take the 12.5% to 6.56%!

 

House of Delegates Energy Committee

Name

Phone

Email

Delegate Craig-Chair

(304) 340-3116

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Delegate Caputo-Vice-Chair

(304) 340-3249

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Delegate Andes-Minority Chair

(304) 340-3121

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Delegate Shott-Minority Chair

(304) 340-3187

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Delegate Barker

(304) 340-3152

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Delegate Diserio

(304) 340-3367

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Delegate Eldridge

(304) 340-3113

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Delegate Fragale

(304) 340-3102

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Delegate Kinsey

(304) 340-3155

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Delegate Longstreth

(304) 340-3124

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Delegate Marcum

(304) 340-3126

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Delegate Phillips, L.

(304) 340-3163

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Delegate Phillips, R

(304) 340-3174

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Delegate Poling, D.

(304) 340-3137

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Delegate Skaff

(304) 340-3362

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Delegate Walker

(304) 340-3135

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Delegate Young

(304) 340-3352

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Delegate Anderson

(304) 340-3168

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Delegate Arvon

(304) 340-3384

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Delegate Butler

(304) 340-3199

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Delegate Cadle

(304) 340-3118

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Delegate Frich

(304) 340-3125

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Delegate Ireland

(304) 340-3195

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Delegate McCuskey

(304) 340-3183

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Delegate Smith, R.

(304) 340-3396

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Delegate Sumner

(304) 340-3180

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Take action and let's protect West Virginia's natural resources and citizens!

 

PostHeaderIcon2014 Force Pooling Bill Issues

A Summary of the Lease Integration/Force Pooling Bill

The Bill is Sponsored By:

Senate President Jeff Kessler in the Senate bill 578

House Speaker Tim Miley in the House bill 4558

1. 22C-9-2 (1) “Commission” This Bill will allow the deep well commission to oversee all shallow and deep horizontal wells except coal bed methane wells.  This commission is made up of five members Director of the Department of environmental protection, Chief of the Office of Oil and Gas of the DEP, A Governor appointed independent producer, A Governor appointed public member not employed by the public service committee, and a Governor appointed professional engineer with a degree in engineering or geology and experience in oil and gas.  This commission is dominated by industry people with no mineral (royalty) owner representation. Bill draft page 3 line 16; Website draft page 3

2. 22C-9-2 (4) “Operator” means any owner of the right to develop…and as “royalty owner” as to one-eight interest in such oil and gas;…The Committee has previously allowed deductions from the state minimum of  12.5% royalty, which has the potential of lowering the royalty amount to as low as 6.56%  with natural gas prices at four dollars.  This should be 18% with no deduction to be in line with the national average. Bill draft page 4 line ; Website draft page 4

3. 22C-9-7a (C) (2A) “…consent or agreement to pool or unitize the acreage to be included in the horizontal well unit from executory interest royalty owners of sixty-seven percent or more..” 1.00 minus .67 = .33 times 640 = 211 acres of people who would not consent to a lease and could still be forced pooled into the unit.  99% of all tracts do not contain 211 net acres, thus almost everybody will be forced in. Shouldn’t royalty owners be treated equally with operators who have a threshold of 85%. Bill draft page 17 line; Website draft page 8

4. 22C-9-7a (C) (c) (i) “Made good faith offers to consent or agree to unitization” Written correspondence of proof should be required to determine a good faith offer has been made. Bill draft page 18 line 13; Website draft page 18

5. 22C-9-7a (d) (1) (J) “A percentage allocation to the separately owned tracts…” There needs to be a pugh clause inserted here, to avoid sterilizing any unused acreage. Bill draft page 22 line 12; Website draft page 22

6. 22C-9-7a (f) (E) Any unitization consideration due. There MUST be compensation to force the will of the driller on to West Virginians. Bill draft page 26 line 3; Website draft page 26

7. 22C-9-7a (f)(E) (6)Further, if an award of unitization consideration differs from the rights under a lease or other contract, the applicant, all royalty owners and owners of leasehold, working interest, overriding royalty interest, and other interest in the oil and gas shall be bound by the order. By the constitution it is illegal for any commission to arbitrarily change a contract. Bill draft page 27 line 1; Website draft page 27

8. 22C-9-7a (f) (7) The Royalty owner does not have the option to participate in the well although the operator of the lease does have that option. Bill draft page 27 line 13; Website draft page 27

9. 22C-9-7a (f)(1)(E) (18) “…if such a well has been drilled within three years the horizontal well unit shall continue in force and effect until all the horizontal wells drilled in the horizontal unit are plugged.” This should be changed to the standard which is “continue in full force and effect until the well is no longer capable of production in paying quantities” or 99 years. Bill draft page 33 line 7; Website draft page 33

 

10. 22C-9-7a (f)(1)(E) (19)  “…the commission shall determine what is “just and reasonable” based on relevant evidence adduced at a hearing regarding amounts paid or consideration given in arm’s length transactions in the vicinity of the horizontal well unit and within a reasonable time prior to the hearing…” In the vicinity is a very vague wording, we suggest within ten miles of the well and within a reasonable time period is also vague, we believe a proper time period would be ten year because most oil and gas companies want to lease for 5 years with a 5 year renewal.  Bill draft page 33 line 15; Website draft page 34

 

PostHeaderIconFORCE POOLING INTRODUCED!

The new FORCE POOLING BILL WAS INTRODUCED Friday February 14 in the Senate as Bill 578; it was introduced on Monday February 17 in the House as Bill 4558.  Both of these bills are going to be reviewed in the energy committees for both the house and senate and then on to judiciary in both the house and senate.

Please contact the following Delegates in the house to oppose this bill:

House of Delegates Energy Committee

Name

Phone

Email

Delegate Craig-Chair

(304) 340-3116

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Delegate Caputo-Vice-Chair

(304) 340-3249

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Delegate Andes-Minority Chair

(304) 340-3121

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Delegate Shott-Minority Chair

(304) 340-3187

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Delegate Barker

(304) 340-3152

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Delegate Diserio

(304) 340-3367

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Delegate Eldridge

(304) 340-3113

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Delegate Fragale

(304) 340-3102

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Delegate Kinsey

(304) 340-3155

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Delegate Longstreth

(304) 340-3124

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Delegate Marcum

(304) 340-3126

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Delegate Phillips, L.

(304) 340-3163

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Delegate Phillips, R

(304) 340-3174

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Delegate Poling, D.

(304) 340-3137

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Delegate Skaff

(304) 340-3362

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Delegate Walker

(304) 340-3135

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Delegate Young

(304) 340-3352

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Delegate Anderson

(304) 340-3168

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Delegate Arvon

(304) 340-3384

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Delegate Butler

(304) 340-3199

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Delegate Cadle

(304) 340-3118

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Delegate Frich

(304) 340-3125

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Delegate Ireland

(304) 340-3195

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Delegate McCuskey

(304) 340-3183

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Delegate Smith, R.

(304) 340-3396

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Delegate Sumner

(304) 340-3180

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Please also contact the following Senators:

Senate Energy, Industry and Mining Committee

Name

Phone

Email

Senator Facemire - Chair

(304) 357-7845

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Senator Kirkendoll - Vice-Chair

(304) 357-7857

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Senator Beach

(304) 357-7919

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Senator Cann

(304) 357-7904

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Senator Green

(304) 357-7831

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Senator Plymale

(304) 357-7937

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Senator Snyder

(304) 357-7957

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Senator Stollings

(304) 357-7939

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Senator Yost

(304) 357-7984

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Senator Barnes

(304) 357-7973

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Senator Nohe

(304) 357-7970

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Senator Sypolt

(304) 357-7914

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Senator Boey

(304) 357-7905

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The previous contacts will be the people voting this bill to the next step which is the judiciary committees.

Let your representatives know how detrimental this bill is going to be to West Virginians!  This is going to make 1/8 (12.5%) royalty the standard and has the potential to allow big drillers to get away without paying any bonus monies!

 

Keep coming back to check our website with where the bill is and what YOU can do to help WVROA protect the rights of West Virginians!!!

 

PostHeaderIcon2014 Legislative Update

Well it’s that time of year again.  Legislation is back in session and we have continue working hard to protect your rights.  Here is a quick recap of what we did in 2013.

2013 brought about the introduction of yet another force pooling bill, 3151 in the House and 616 in the Senate.  We spoke to many delegates and these two bill never got out of committee.

During interims the forced pooling bill was sent to a sub-committee for further research.  During the November Interims all interested parties were invited to give a presentation to the judiciary committee regarding force pooling.  Presentations were made by WVROA, WV Farm Bureau, Land and Mineral, SORO, West Virginia Oil and Gas Association (WVONGA), and Independent Oil and Gas Association (IOGA).  The Farm Bureau, SORO and WVROA all had similar concerns with the proposed bill and we feel that our concerns were heard by the sub-committee.  We were also told during the presentations that WVONGA and IOGA were working on a new bill to introduce in the 2014 Legislative Session.

The 2014 Session has started however things were stalled due to the state of emergency in Charleston.  Legislation has resumed as of January 14.  We hope to meet with IOGA and WVONGA the week of January 20th to hear what they plan to introduce to the Legislature.

Rest assured that we are watching and are determined to represent the royalty owners’ best interests.  We do expect to have a fight this session and will be needing everyone’s help.  Please keep checking our website and email and we will let you know all the details.

 

We would also like to take this time to thank everyone for all your support, we could not have been this successful without you!

 

PostHeaderIconLeasing Clauses to Look for

Top Leasing Clauses to Include or Remove!

1.  Specific Depth Reservation

· Lease only the Marcellus, or only the shallow formations; never lease the surface to center of the earth.

2.  Lease only Your Tract

· Avoid language that includes words such as adjacent, or contiguous; it can allow them to hold your tract even though there is no production.

3.  Your Royalty Payments are Deduction Free

· Deductions or post production expenses on royalty payments can reduce a 12.5% lease to under 6%.

4.  Avoid Enhancement Clauses

· Enhancement clauses have been used against royalty owner’s under the guise of ‘The gas is not marketable at the well head, so transportation is an enhancement’; even if your lease says deduction free.

5.  Pugh Clause

· If a portion of your acreage is not included in a unit, the non-developed acreage is released, allowing for another company to potentially develop it.

6.  Warranty of Title

· Do not give any warranty on your title, in most cases you haven’t done title and they have approached you wanting to lease.

7.  Limit on Shut in Payments

· Put a time limit for how long a shut in payment can hold your lease in full effect.

8. ALWAYS Consult a Lawyer

· These are a few things to watch for and should not be considered legal advice, find a good oil and gas lawyer that will be able to assist in the leasing process.

 
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