SB 554 — Relating to termination, expiration, or cancellation of oil or natural gas leases

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 COMMISSION AdoptedJOINT RejectedRULES STAFF INFO BILL STATUS BILL STATUS BILL TRACKING STATE LAW WEST VIRGINIA CODE ACTS OF THE LEGISLATURE CODE OF 1931 WV CONSTITUTION US CONSTITUTION REPORTS AGENCY REPORTS AGENCY GRANT AWARDS PERFORMANCE EVALUATIONS POST AUDITS EDUCATIONAL CITIZEN’S GUIDE INTERNSHIP PROGRAM PAGE PROGRAM PUBLICATIONS PHOTO GALLERY CAPITOL HISTORY HOW A BILL BECOMES LAW CONTACT SENATE ROSTER HOUSE ROSTER PUBLIC INFO.

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Green = existing Code.

Red = new code to be enacted WEST virginia legislature regular session Enrolled Committee Substitute for Committee Substitute for Senate Bill 554 Senators Smith, Clements, Pitsenbarger, Roberts, Trump, Romano, Hamilton, and Maroney, original sponsors [Passed March 2, 2020;

in effect 90 days from passage]     AN ACT to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §36-4-9b, relating to the termination, expiration, or cancellation of oil or natural gas leases;

providing a requirement for a lessee to execute and deliver to the lessor, within a specified time and without cost, a recordable release for terminated, expired, or canceled oil or natural gas leases;

providing for a procedure by which a lessor may serve notice to a lessee if a lessee fails to timely provide the release;

providing requirements for the content of the notice;

requiring a lessee to timely notify the lessor in writing of a dispute regarding the termination, expiration, or cancellation of the oil and natural gas lease;

providing for an affidavit of termination, expiration, or cancellation with specified contents;

and providing a requirement that county clerks accept and record said affidavit.

Be it enacted by the Legislature of West Virginia:

ARTICLE 4.

COVENANTS.

§36-4-9b.

Release of terminated, expired or canceled oil or natural gas leases.

(a) Unless a different time is required by the lease, within 60 days after the termination, expiration, or cancellation of an oil or natural gas lease, the lessee shall deliver to the lessor, without cost to the lessor, or his or her successors or assigns, a properly executed and notarized release of such lease in recordable form.

(b) If the lessee fails to provide a timely release as required by subsection (a) of this section, the lessor, or his or her successors or assigns, may serve notice of lessee’s failure to provide such release.

The notice shall be made in good faith and contain the following:

(1) A statement that:

(A) The lease is terminated, expired, or canceled according to its terms, including the date of such termination, expiration, or cancellation;

(B) The lessee has a duty to provide a release pursuant to subsection (a) of this section;

and (C) If the release, or a written dispute to such termination, expiration, or cancellation, is not received by the lessor, or his or her successors or assigns, from the lessee within 60 days from receipt of the notice, the lessor, or his or her successors or assigns, shall have the right to file an affidavit of termination, expiration, or cancellation under subsection (e) of this section;

(2) The name and address of the lessor, or his or her successors or assigns;

(3) A brief description of the land covered by the lease including, but not limited to, the state, county, tax district, tax map and parcel, watershed, historical farm name, or other identifying information;

(4) If there is a well on the land covered by the lease, the name or API number of the well, if known to the lessor, or his or her successors or assigns;

(5) If located in a unit, the name of the unit, if known, to the lessor, or his or her successors or assigns;

and (6) The recording information for the lease, or a memorandum of lease, in the public records of the county or counties, along with the execution date of the lease, and the identity of the original lessor and lessee under the lease.

(7) The notice when served shall include a service sheet showing the names and addresses of all persons upon whom the notice has been served.

(c) The notice shall be sent to the following persons as are shown by the lessor’s reasonable examination of the public records:

(1) Lessee;

(2) lessee’s assignee;

(3) all other lessors;

and (4) all other persons who have an interest in the leasehold estate or the oil and natural gas leased thereunder.

A lessor’s inability to afford notice to everyone to whom notice is to be given thereunder does not relieve a lessee of its obligation to respond.

(d) Service of notice under subsections (b) and (c) of this section shall be effected either personally or by certified mail to the recipient’s last known business addresses, or, if service cannot reasonably be made by those means, by publication once a week for two weeks in a newspaper of general circulation in the county or counties in which the lands covered by the lease are located.

(e) If, after receiving a notice of termination, expiration, or cancellation under subsections (b), (c), and (d) of this section, a lessee disputes in good faith that the oil or natural gas lease is terminated, expired, or canceled as stated in the notice, the lessee must, not more than 60 days after receipt of the notice, deliver a written dispute of the contents of the notice to the lessor, or his or her successors or assigns, detailing the good-faith basis for such dispute.

(f) A lessor, or his or her successors or assigns, who has served a notice under subsections (b), (c) and (d) of this section, and who fails to receive a timely dispute from a lessee under subsection (e) of this section, may record an affidavit of termination, expiration, or cancellation of an oil or natural gas lease in the office of the county clerk in the county or counties where the lands covered by the lease are situated.

The county clerk of each county shall accept all such affidavits and shall enter and record them in the official records of that county and shall index each in the indices under the names, as they appear in the affidavit, of the original lessor, the original lessee, the lessor seeking the release, and the lessee identified in the affidavit.