Governor Signs Legislation Permitting Pooling Of Gas Drilling Units

Senate Bill Number 259, which amends the Guaranteed Minimum Royalty Act by allowing drillers to pool land into gas-drilling units, was signed by Governor Corbett today after fast-track approval by the Senate on June 30th.  The bill allows joint development on adjacent land unless expressly prohibited by the applicable leases.  Absent any agreement by all affected royalty owners, the production shall be allocated to each royalty owner in a proportion deemed reasonable by the operator.  The bill does not permit the forced pooling of unleased oil and gas estates.  Additionally, any lease that does not provide for at least one-eighth royalty shall be subject to an escalation equal to one-eighth royalty when the original state of the subject land is altered by any new drilling or any other procedure for increasing production.