Triple Royalties Provision Stripped from WV Bill on Late Payments
Earlier this week, MDN reported on a bill making its way through West Virginia’s legislative sausage-making process (see WV Bill Triples Conventional Well Royalty Payments if Made Late). WV House Bill (HB) 4292 attempts to close a loophole affecting landowners and mineral rights owners with a conventional oil or gas well, some of whom suffer from late or completely missing royalty payments. The bill just got a lobotomy and is pretty much unrecognizable from the original.
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The Pittsburgh Post-Gazette has an excellent article reporting on an effort by Tenaska, one of the largest privately operated companies in the U.S., to build a carbon capture and sequestration (CCS) hub spanning tens of thousands of acres in Pennsylvania, Ohio, and West Virginia. Landmen are “knocking on doors again” in all three states, looking to sign up landowners to store carbon dioxide deep underground. We have the details below, including how much money Tenaska is paying as a signing bonus and how much is on offer (per acre) each year.
West Virginia House Bill (HB) 4292 attempts to close a loophole affecting landowners and mineral rights owners with a conventional oil or gas well. Royalties from conventional O&G wells are typically small, as little as $40-$50 per month. Some energy companies (hopefully very few) that own the wells are intentionally late with royalty payments or outright refuse to make the payments. Because the amounts are so small, lawyers typically won’t take on a case for nonpayment of royalties. This bill aims to fix that.
Last week, the Baker Hughes rig count added four rigs after losing two rigs the week before. The count went from 619 active rigs two weeks ago to 623 last week. We continue to see the national count stay roughly around 620-630 active rigs. The Marcellus/Utica gained two active rigs and now sits at 44 — the most active rigs we’ve had since last August! Two rigs were added to Pennsylvania, while Ohio and West Virginia each maintained the same count as the previous week.
There were 20 new permits issued to drill in the Marcellus/Utica during the week of Jan. 29 – Feb. 4, versus 27 permits issued during the prior week. Pennsylvania issued 12 new permits last week. Ohio issued 6 new permits. West Virginia issued 2 new permits last week. We had a tie for the company receiving the most permits. Seneca Resources received 4 permits to drill in Tioga County, PA, and Ascent Resources received 4 permits to drill in Harrison County, OH.
TC Energy, formerly TransCanada, is a huge pipeline company headquartered in Canada. TC owns and operates the Columbia Gas Transmission and Columbia Gulf Transmission pipeline systems in the Marcellus/Utica region. Yesterday, TC announced that it plans to move its regional headquarters from Kanawha City (a neighborhood in Charleston, WV) to downtown Charleston and build a new $60 million building in the process. TC said the existing 110,000-square-foot former CASCI building will be demolished and replaced with a new building, with construction expected to be complete in 2025 and employees moving in by 2026.
Last week, MDN told you about a “clerical error” by a third-party vendor in calculating the new formula for natural gas property tax valuations in West Virginia that caused newly producing natural gas wells to be undervalued, leading to the loss of millions of dollars for the counties that see the most shale drilling (see 
Hopefully, we’re near the end of an effort to overturn a bill passed in early 2022 by the West Virginia legislature, Senate Bill (SB) 694, which finally brought forced pooling for shale wells to the Mountain State after eight years of trying (see 
Last summer, MDN told you that the new system to assess valuations of shale wells in West Virginia had turned into a mess (see 
In March 2023, the West Virginia legislature passed House Bill 3110, giving the state Dept. of Environmental Protection (DEP) extra funds to hire more oil and gas well inspectors. At that time, the state had just ten inspectors to oversee not only all of the state’s 75,000 documented/known wells but also the state’s estimated 15,000 abandoned wells. Frankly, it’s an impossible task for so few inspectors. HB 3110 provided funding for another 10 positions (20 inspectors total). In the past year, the DEP has hired another five, with two more in the pipeline, for a total of 17. It would be better if they had 40 or more!
West Virginia continues to lag behind both Pennsylvania and Ohio with respect to building combined cycle natural gas-fired power plants. PA and OH have a combined 39 such power plants. WV has zero. In March 2023, West Virginia Senate Bill (SB) 188, aimed at making WV’s gas-fired power generation more competitive with its neighbors in PA and OH, was passed by the legislature and signed into law by Gov. Jim Justice (see 
Antero Resources is one of the largest drillers in the Marcellus/Utica (with major assets in West Virginia). As good and careful as companies like Antero are when hiring, sometimes there’s a rotten apple found in the barrel. Such was the case with a former employee who headed up the company’s operations in WV — where most of its drilling happens. The former employee took bribes and kickbacks from a vendor over a period of years (2012-2015), steering contracts to that vendor. The vendor’s performance was not as good as other competitors. At the end of years of litigation, Antero was finally awarded compensation from a jury, and a bit extra from a judge, to make up for the actions of their rogue employee (see