SB 360 — Clarifying oil and gas permits not be on flat well royalty leases

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Red = new code to be enacted WEST virginia legislature regular session Enrolled Committee Substitute for Senate Bill 360 By Senator Clements,Clements original[Originating sponsorin [Passedthe MarchCommittee 2,on 2018;Energy, Industry, and Mining;

inReported effecton 90February days7, from2018] passage]     ANA ACTBILL to amend and reenact §22-6-8 of the Code of West Virginia, 1931, as amended, relating to oil and gas permits not to be on flat well royalty leasesleases; generally;

modifyinglegislative thefindings permit issuance prohibition from one-eighth interest of the total amount paid to or received at the well head for oil and gasdeclarations; extracted to not less than one-eighth of the gross proceeds free from any deduction for post-production expenses;

and providing that a permit applicantrequirements. may file with its application an affidavit which certifies that the affiant is authorized by the owner of the working interest in the well to tender to the owner of the oil or gas a certain royalty of the gross proceeds, free from certain deductions, received at the first point of sale to an unaffiliated third-party purchaser in an arm’s length transaction.

(e) To avoid the permit prohibition of §22-6-8(d) of this code, the applicant may file with such application an affidavit which certifies that the affiant is authorized by the owner of the working interest in the well to state that it shall tender to the owner of the oil or gas in place not less than one eighth of the total amount paid to or received by or allowed to the owner of the working interest at the wellhead for the oil or gas so extracted, produced or marketed before deducting the amount to be paid to or set aside for the owner of the oil or gas in place, on all such oil or gas to be extracted, produced or marketed from the well of the gross proceeds, free from any deductions for post-production expenses, received at the first point of sale to an unaffiliated third-party purchaser in an arm’s length transaction for the oil or gas so extracted, produced or marketed before deducting the amount to be paid to or set aside for the owner of the oil or gas in place, on all such oil or gas to be extracted, produced or marketed from the well.

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The purpose of this bill is to clarify the royalty owed to a royalty owner in an oil and gas lease.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

_______________ JUDICIARY COMMITTEE AMENDMENT By striking out the title and substituting therefor a new title, to read as follows:

Eng.

Com.

Sub.

for Senate Bill 360—A BILL to amend and reenact §22-6-8 of the Code of West Virginia, 1931, as amended, relating generally to flat well royalty leases;

modifying the permit issuance prohibition from one-eighth interest of the total amount paid to or received at the well head for oil and gas extracted to not less than one-eighth of the gross proceeds free from any deduction for post-production expenses;

and providing that a permit applicant may file with its application an affidavit which certifies that the affiant is authorized by the owner of the working interest in the well to tender to the owner of the oil or gas a certain royalty of the gross proceeds, free from certain deductions, received at the first point of sale to an unaffiliated third-party purchaser in an arm's length transaction.

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