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West Virginia Co-Tenancy Legislation Advances to House Floor

This year’s version of legislation that would make it easier for West Virginia’s natural gas producers to block up acreage for longer laterals by gathering leaseholders into large tracts has passed committee and is scheduled for its first reading before the full state House of Representatives on Tuesday.

Introduced last month, HB 4268 would require a producer to obtain a simple-majority agreement from mineral rights owners to gather them into a tract of land for development. Currently, West Virginia is the only major oil and gas producing state that still allows a minority interest owner to prevent all others from allowing drilling, according to the West Virginia Oil and Natural Gas Association, which supports the bill.

The legislation passed the House Energy Committee last month and cleared the House Judiciary Committee last week on a party line vote of 16-9, with Republicans in favor and Democrats opposed.

HB 4268 is the latest attempt to get some kind of legislation on the books to gather landowners into the kinds of large tracts that are more conducive to unconventional horizontal drilling. Forced pooling has repeatedly failed over the years because of legislators’ concerns about property rights. The industry dropped those efforts last year and instead introduced co-tenancy and joint development proposals.

Joint development, which would have allowed unconventional drilling to occur on land with older leases without modifying them, was dropped from this year’s bill because proponents felt it was too controversial. Co-tenancy, however, is still on the table. The current bill would require 75% of landowners in a proposed tract to give their consent before drilling could proceed.

After the judiciary approved the bill on Friday, both industry and landowner representatives signaled their support for it, according to local news media reports. But as in year’s past, they’re concerned that if the bill is amended significantly then it could fail. Last year’s legislation, SB 576, passed the Senate, but got stuck in the House Energy Committee, where lawmakers were too busy working through a packed schedule.

HB 4268 needs three readings in the House before a vote. The 60-day regular session ends on March 10. Co-tenancy is the industry’s top legislative priority this year.

 

 

 

 

 

 

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