WV Co-Tenancy Bill Survives Challenge, Amended, Final Vote Today
Two days ago we reported that the West Virginia House of Delegates was due to vote on House Bill (HB) 4268, the “Co-tenancy Modernization and Majority Protection Act” (see WV Votes on Co-Tenancy Bill Today; Anti Gets Mouthy, “Dragged” Away). In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. A vote by the full House didn’t end up happening on Tuesday, as originally predicted. Amendments to the bill were offered. One of the amendments would have changed the ratio of rights owners who must sign on the dotted line to allow leasing from 75% all the way up to 90%–which isn’t feasible. Fortunately that amendment was voted down 57-40. However, another amendment–to reallocate half of the unclaimed royalties to fund health insurance for public employees including teachers–did pass (50-47). In the original bill 100% of unclaimed royalty revenue was to be used to cap orphan wells. Now the orphans only get half the funding. Perhaps most importantly, an amendment to limit co-tenancy to properties with seven or more rights owners passed 90-6. That amendment is intended to keep WV out of family squabbles, where just a few people own the mineral rights. The now fully-amended, fully-discussed bill is ready for a final final House vote, which is scheduled for today. After the House votes, it’s on to the Senate. Below are reports about the amendment process in the House…
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In January, MDN reported that Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA–had received permission from the Federal Energy Regulatory Commission (FERC) to begin tree clearing and construction of access roads and construction yards in five West Virginia counties: Wetzel, Harrison, Doddridge, Lewis and Braxton counties (see 
Today a co-tenancy bill is due for a vote by the full House of Delegates and from there will get sent on to the WV Senate. Co-tenancy is NOT forced pooling. It is legislation that will give a majority of rights owners in a property the authority to sign a lease on behalf of all the rights owners. In WV there are often multiple rights owners listed for a property–sometimes 200 or more rights owners for a single piece of property! It is often difficult, if not impossible, to track them all down and get them all to sign on the dotted line. Co-tenancy corrects that situation. In the current bill, House Bill (HB) 4268, if 75% of the rights owners agree to lease the property for oil and gas drilling, that’s “good enough.” The bill will open up more Marcellus and Utica acreage to be drilled. As we previously reported, almost everyone is in favor it, including landowner groups (see 
Last June, the West Virginia Public Service Commission held a public hearing in Clarksburg, WV on the proposed ESC Harrison County Power Plant project (see 
Tree clearing for Dominion’s $5 billion Atlantic Coast Pipeline (ACP) has already begun in West Virginia (see 
On Wednesday MDN brought you the news that Ascent Resources Marcellus, a company founded by Aubrey McClendon after he left Chesapeake Energy, has filed for Chapter 11 bankruptcy (see 
CNX Resources, in addition to issuing an announcement about proved reserves yesterday (see today’s companion story), also issued an announcement about CNX the drilling company selling its Shirley-Pennsboro gathering system in West Virginia to CNX the pipeline company (CNX Midstream) for $265 million. Yes, in a sense it is moving assets around on paper. However, this seemingly innocuous announcement is interesting to MDN for a couple of reasons. First, there is a trend of splitting companies apart–to spin out the pipeline/midstream stuff into its own standalone company, separate from the drilling part of the company. EQT, a major CNX competitor, is going through the process of evaluating whether or not to spin off their pipeline subsidiary into its own company (see 
Wheeling, West Virginia–known as “the Friendly City”–is about to get an even bigger smile on its face. Wheeling city leaders are about to sign a lease agreement to allow American Petroleum Partners to drill under several “old city landfills” that have been closed for decades. The up-front signing bonus for 336 acres of Wheeling-owned land will be $2 million–which works out to ~$5,952 per acre. Once gas begins flowing, the city will get an 18.5% royalty. The money will be used for “paving, playgrounds, economic development and other city functions.” Does American Petroleum Partners (APP) sound familiar? In December we brought you the news that APP had leased the 66-acre Wheeling Park High School campus for shale drilling–under (not on) the campus–for $6,000 per acre (see 
As predicated, a co-tenancy bill has been introduced in this year’s 60-day session of the West Virginia legislature (see 
In another MDN post today, we do a deep dive into West Virginia House Bill (HB) 4268, the “Co-tenancy Modernization and Majority Protection Act” (see WV Co-Tenancy, Royalty Transparency Bills Make Progress). One of the organizations closely watching the progress of that bill is the WV Farm Bureau, which lobbies for the best interests of mineral owners, farmers and rural residents. What does the Farm Bureau think of the bill so far? Last week, on the very day HB 4268 was introduced, Farm Bureau director of Governmental Affairs, Dwayne O’Dell, penned an editorial in which he lends tepid support for the bill, IF there are protections built in for landowners. O’Dell begins his editorial by stating he’s worried that WV legislators are, “allowing oil and gas developers to take private property rights unfettered.” That is, they are literally “giving away the farm.” O’Dell is favor of “providing oil and gas companies with a reasonable platform to succeed.” But not at the expense of his members. Here’s a big, fat caution flag being waved by the WV Farm Bureau with respect to the co-tenancy bill, along with a call for the legislature to revisit the issue of “at the well head” pricing…
A newly introduced bill in the West Virginia legislature–Senate Bill (SB) 295–appears to give WV counties the power to impose their own “impact fee” on the oil and gas industry. We say appears because the words “oil” and “gas” never appear in the bill–but those words do appear in a newspaper article discussing the bill. WV counties are in a bind. In PA, counties and towns get a healthy stream of revenue from PA’s “impact fee” (equivalent of a severance tax). When drilling comes to town roads get a lot of heavy truck traffic. Public services of all kinds–police, fire, government buildings–see more use. PA’s impact fee helps with those things. In Ohio, towns sign RUMAs with drillers–Road Use Maintenance Agreements. But in WV, the tax money counties did receive from the oil and gas industry was reduced in 2011 when the state legislature granted discounts to companies spending more than $50 million in the state. Want to fix or build a new road to handle traffic? Good luck! Enter SB 295 which (again) appears to grant counties the ability to assess certain fees, including an “impact fee,” on certain companies in order to assist with things like building and fixing roads. Here’s what we could find about SB 295…
In December MDN told you that Dominion’s $5 billion Atlantic Coast Pipeline (ACP) project had asked permission from the Federal Energy Regulatory Commission (FERC) to begin clearing trees along the path of the pipeline in all three states where the pipeline will run: West Virginia, Virginia, and North Carolina (see 
It’s looking more and more like co-tenancy legislation will pass this year in West Virginia (see