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Pennsylvania Legislature Passes Bill Calling for Monthly Unconventional Production Reports

Lawmakers in both chambers of the Pennsylvania General Assembly have unanimously passed a bill requiring operators of unconventional oil and gas wells to report their production on a monthly basis, a similar practice in other major producing states. The bill is awaiting Gov. Tom Corbett's signature.

Under HB 2278, also known as the Unconventional Well Report Act, operators of unconventional wells would submit to the state Department of Environmental Protection (DEP) "a monthly report specifying the amount of production on the most well-specific basis available." The first report, due by March 31, would also need to specify the status of each well. In subsequent reports, only changes in a well's status would need to be reported.

"Subsequent [production] reports shall be filed with the [DEP] within 45 days after the close of the reporting period and shall include production data from the preceding reporting period," the bill says. "The Commonwealth may utilize information contained in reports filed under this act in enforcement proceedings, in making designations or determinations under [the administrative code], or in aggregate form for statistical purposes."

The DEP would post the reports on a website accessible by the public, and the costs would be paid by fees collected by the departments.

Unconventional operators are currently required to report production twice a year.

HB 2278 is actually the second bill in 13 months to call for monthly production reports. Both bills were introduced by Rep. Tina Pickett (R-Towanda), who wants landowners to receive the production data as a way to ensure that they receive accurate royalty payments (see Shale Daily, June 24; Sept. 16, 2013).

The bill received unanimous support from four committees before winning passage in the state House of Representatives (202-0) on June 27, and the state Senate (48-0) on Oct. 15. Two Senators did not vote on the bill, and one House member was on leave. It was presented to Corbett last Thursday.

In August 2013, landowners in the state reached a $7.5 million settlement with Chesapeake Energy Corp. over claims the company improperly deducted post-production costs from royalty payments. But the settlement is stalled in federal court (see Shale Daily, Sept. 11; Sept. 4, 2013). Two similar cases involving Chesapeake are also moving forward (see Shale Daily, July 2; April 10).

The issue is by no means unique to Chesapeake or Pennsylvania. Last October, a federal judge certified class action cases against EQT Corp. and Consol Energy Corp. on allegations they cheated landowners in Southwest Virginia of millions in royalties (see Daily GPI, Oct. 4, 2013). Range Resources Corp. was sued by landowners in West Virginia more than three years ago (see Shale Daily, Oct. 20, 2010).

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