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Favoring drillers

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Thursday, July 11, 2013, 8:55 p.m.
 

As an attorney who represents landowners in oil and gas matters, I feel compelled to comment on the troubling forced-pooling provision that state Senate Bill 259, passed by the Legislature, contains.

Section 2.1 allows an operator to develop contiguous leases jointly unless expressly prohibited by a lease. The rub is that it is unlikely that you will find many oil and gas leases with a provision that expressly prohibits pooling.

As to leases currently being offered, it is highly doubtful that any gas company would agree to such a provision. As to leases already executed, it would be difficult to find one with an express provision prohibiting pooling.

Bottom line: This act allows gas companies to forcibly pool and landowners have no recourse!

In addition, this provision essentially allows gas companies to dictate who gets what in royalties.

It is no secret that Marcellus shale drilling has significantly and irrevocably changed the oil and gas game in Pennsylvania. However, the provision on forced pooling in the act significantly tips the balance in favor of gas companies.

Paul R. Yagelski

The writer is co-chairman of Pittsburgh law firm Rothman Gordon's Marcellus, Utica and Other Shales Practice Group.

 

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