Corbett: It is not my intention to alter or affect the agreed-to terms of any existing lease

QFFECE THE Governor      
July 9, 2013



Today I signed Senate Bill 259, which amends Act 60 of 1979, commonly referred to as the Guaranteed 

Minimum Royalty Act. This legislation provides enhanced transparency to owners of oil and gas interests 

by requiring, at a minimum, that certain information which pertains to the payment for oil or gas production 

be disclosed on a royalty check stub or other means provided to the interest owner on a regular basis. 

These are important steps to better inform landowners and leaseholders regarding the production occurring 

from their property.  



I am aware of several questions and concerns which have been 'raised with regard to Section 4 of Senate 

Bill 259, which added a new Section 2.1 to the underlying statute. By signing this legislation, it is my 

intention, and I believe that of the General Assembly, to enhance the efficient development of oil and 

natural gas while safeguarding the rights and protections of landowners and leaseholders. 



It is not my intention to alter or affect the common-law Rule of Apportionment, or to alter or affect the 

agreed-to terms of any existing lease. I believe the constitutional protections which guard against legislative

impairment of contracts serves as an added backstop to these concerns.  



Moreover, I do not believe anything in Senate Bill 259 expands the ability of an oil or gas operator to define the size of a drilling unit, or to expand the ability of any operator to hold by production any parcels of leased land. Instead, the legal clarity provided by this legislation will further minimize environmental impacts and 

surface disturbance associated with oil or gas development; maximize the economic benefits of royalties 

realized by landowners and leaseholders; expand the number of royalty owners in the Commonwealth by 

encouraging the efficient development of oil and gas resources; and ensure that landowners and 

leaseholders are compensated fairly.  



I look forward to working with members of the General Assembly on additional, future steps to ensure that the interests of landowners are paramount.  



Sincerely, 

TOM CORBETT  

Governor

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Replies to This Discussion

Permalink Reply by jason smith on July 23, 2013 at 1:38pm
Rick at least the Republicans don't boo God at their Convention...
Permalink Reply by Rick on July 23, 2013 at 1:58pm

Which God are you talkin about?

Permalink Reply by jason smith on July 23, 2013 at 5:55pm
The God that 80 or 90 % Americans believe in . God bless America and protect her from Godless liberals...
Permalink Reply by Fred Flintlock on July 10, 2013 at 12:58am

All your phone calls really helped....lol

Permalink Reply by Trapper on July 10, 2013 at 9:50am

carp,

Here in Lawrence County PA it has been reported that our local coal fired power plant is to be converted to gas. It was to be closed but now is getting a new lease on life , thanks to our abundant gas resources.

Glenn

Permalink Reply by Rick on July 12, 2013 at 7:45am

Thanks Fred you are a scholar and a gentleman! a fine example of a humble winner!

Permalink Reply by Mark McGrail on July 10, 2013 at 3:02am

I would like to thank everyone who made an effort to influence the decision of the Governor.

No, we did not succeed. But we cannot look at this as losing the war (for landowners rights).

This was one battle in an ongoing struggle. From here we should work to have the offensive language removed . We should also remain vigilant for other attempts to erode landowner rights.

There will be court cases over this legislation. The battle is not over.

We were successful in Ohio, twice, with our lobbying efforts. We must also remain active in PA .

Permalink Reply by Frank Walker on July 10, 2013 at 5:55am

Mark, you're right about the court cases.  And I feel really sorry for landowners now placed in the position of having to go to court, at great expense, to defend their leases.  This is so wrong and manifestly unfair to decent people who only want a fair shake on their royalties.

Equally reprehensible, in my view, most of the landowners impacted by this almost surely are today unaware of the clobbering they just have suffered.  That poison pill was snuck at the last minute into a bill which is otherwise friendly to landowners.  And Corbett signed the bill quickly at a time of year many families are on vacation.  This entire episode stinks out loud!!

Permalink Reply by JREwing on July 10, 2013 at 6:53am

Ok, let's try this again since you completely ignored yesterday afternoon's post in the other thread.  First, what is manifestly unfair?  Please explain.

And again; my view:  Lessors HBP with older shallow well leases that DO NOT have a clause that specifically prohibits pooling can now be pooled with other landowners into a horizontal production unit.(How many people is this btw?)  The result being that these affected landowners cannot attempt to renegotiate the leases that THEY SIGNED for shallow well drilling based on the lack of a unitization clause to take advantage of the huge amounts of "signing bonus" money that are currently being paid for signing TODAY'S horizontal leases.  Are you contending that this is what's unfair?  The fact that these lessors can't take a loophole in the law to strong-arm the O&G companies into renegotiating a signing bonus and new lease and royalty terms?  Is it unfair because the affected lessors don't get a shot at a redo of their lease?

What has been done by the signing of this bill is certainly a blow to the individual affected landowners, but it certainly wasn't unfair to them.  They had signed leases and had agreed to their respective terms long ago.  There is NO reason for them(or you)to scream UNFAIR!  That contention is absurd and the words fair and unfair get tossed around on this forum to the point of ad nauseam.  It's a business. It's a contract.  Sign or don't sign.  There is no fair or unfair lease.  PERIOD.  And IF you signed, you shouldn't get a redo... 

And again, these folks who were lanquishing with old shallow well leases and wells now have an opportunity they never imagined when signing those leases; to become part of a Marcellus or Utica horizontal well unit(s) and potentially realize royalty income in amounts they never imagined in their wildest dreams.

Do you have a persecution complex or something?  

Permalink Reply by Frank Walker on July 10, 2013 at 10:37am

Not unfair, JR?  You really are a gas company person.  That's for certain.  This is a landowner website, not your website.  You are a troll here.  Of course gas companies have a different view on this.  They are the ones that snuck this into PA law after bribing our Legislators and our Governor to the max.

NARO actively and vigorously opposed this legislation.  Keith Mauck, publisher of this website, was opposed.  Do you have any idea of Mauck's credentials??  He publishes websites for landowners all across the USA for goodness sake;  not just this one.  He knows this stuff better than you or me.

And of course smart PA landowners were also opposed.  This takes money out of PA landowners' pockets, as you well know, millions of dollars.  Like you people need the money!!

Just exactly how stupid does the gas industry think we landowners are!  You expect us to smile and say "thank you" after you rape us?  You expect us to knuckle under to your wild visions of how things should be?!

I want you to feel the hatred many of us have for you and your kind.  I want you to realize we do not appreciate one bit the way this was snuck at the last moment into a bill, which had been ballyhooed and publicized as "landowner friendly", by one of your filthy lobbyists.

Unfair?  Damn straight this was unfair.  Don't look for love, redemption, or understanding here, dude.  You came to the wrong place.  Please take your industry crapola with you and get lost!!!!!!!

Permalink Reply by scott brion on July 11, 2013 at 12:19am

JR - I think you miss the mark here.  

In PA it is established practice that in order to be pooled you have to have specific lease language providing lessee the right to pool and ostensibly lease language governing the terms of that pooling.  In PA there is no other law or regulation that limits pooling.  Go read the bill and tell me it is reasonable (or fair) for that language to be the sole basis for pooling an existing lease.  That aside, their is no limit to the language that a lease be HBP.  Many 10 yr leases in effect in Northern pa did not have pooling clauses.  The bill grants lessee a new lease right which they did not previously have (which has value to them) and it is at the expense of lessor.  How is that anything but unfair?  

If PA lawmakers want to amend lease terms for the benefit of landowners - I have a long list of suggestions for them.....

You are right about fairness not being applicable.  Oil & gas leasing is patently unfair in PA.  That does not mean that we should accept lawmakers passing bad (to put it kindly) legislation that out of the blue grants more rights to lessees to the distinct disadvantage of lessors. 

Permalink Reply by Armstrong Land on July 11, 2013 at 1:47am

Scott:

You write, "In PA it is established practice that in order to be pooled you have to have specific lease language providing lessee the right to pool and ostensibly lease language governing the terms of that pooling..."

 

Have you not read section 2.1 of SB 259?  I believe this states that in the absence of a restriction or limitation on pooling, that the lease may be pooled with other leases by the same operator.  I believe this establishes the practice to be the exact inverse of what you state.  Let me know what I'm missing here.

 

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