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W.Va. governor signs bill supporting oil, gas drilling on jointly owned property

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W.Va. governor signs bill supporting oil, gas drilling on jointly owned property

The governor of West Virginia signed into law a bill allowing oil and gas drilling on properties if the developers have the consent of royalty owners holding the majority of the royalty interests, as opposed to all of them.

Gov. Jim Justice on March 9 signed HB 4268 to facilitate "lawful use" of acreage by co-tenants and to "foster, encourage and promote" oil and gas exploration in the state, according to the bill. Under the new law, an oil and gas operator or owner that intends to develop property with seven or more royalty owners may do so as long as the royalty owners holding at least 75% of the royalty interests have given their consent.

Previously, a single co-tenant may halt drilling by not giving consent, in which case the developer would have to sue to partition the property. The new bill gives the non-consenting co-tenant a choice to either receive a pro rata share of production royalty, or to participate in the development and receive a pro rata share of the revenue and cost, with amounts depending on the share of production on the tracts being developed according to the non-consenting co-tenant's interest.

"This co-tenancy law will allow for oil and gas development while protecting the rights of surface, mineral and landowners," Justice said in a March 9 news release. Major Appalachian producers such as EQT Corp. and Antero Resources Corp. lobbied for the bill to be passed.

The law is scheduled to become effective on July 1.