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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY YAW, FEBRUARY 28, 2011 |
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| REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 28, 2011 |
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| AN ACT |
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1 | Amending the act of December 19, 1984 (P.L.1140, No.223), |
2 | entitled "An act relating to the development of oil and gas |
3 | and coal; imposing duties and powers on the Department of |
4 | Environmental Resources; imposing notification requirements |
5 | to protect landowners; and providing for definitions, for |
6 | various requirements to regulate the drilling and operation |
7 | of oil and gas wells, for gas storage reservoirs, for various |
8 | reporting requirements, including certain requirements |
9 | concerning the operation of coal mines, for well permits, for |
10 | well registration, for distance requirements, for well casing |
11 | requirements, for safety device requirements, for storage |
12 | reservoir obligations, for well bonding requirements, for a |
13 | Well Plugging Restricted Revenue Account to enforce oil and |
14 | gas well plugging requirements, for the creation of an Oil |
15 | and Gas Technical Advisory Board, for oil and gas well |
16 | inspections, for enforcement and for penalties," providing |
17 | for lease extended by production. |
18 | The General Assembly of the Commonwealth of Pennsylvania |
19 | hereby enacts as follows: |
20 | Section 1. The act of December 19, 1984 (P.L.1140, No.223), |
21 | known as the Oil and Gas Act, is amended by adding a section to |
22 | read: |
23 | Section 203.1. Lease extended by production. |
24 | (a) Prohibition.--Any portion of land subject to a lease, |
25 | which is combined with other lands or leases to form a unit, |
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1 | shall be subject to operations and production on and in the |
2 | unit. The operations and production shall continue a lease in |
3 | force and effect during or after the primary term according to |
4 | the lease provisions only as to that portion of the leased land |
5 | which is included in the unit. Any land covered by a lease and |
6 | not included in the unit shall not be subject to operations or |
7 | production on or in the unit. The lease may be kept in force in |
8 | any manner provided in the lease agreement for leased land not |
9 | included in an agreement. |
10 | (b) Applicability.-- |
11 | (1) Subsection (a) shall apply to any unit formed after |
12 | the effective date of this section. |
13 | (2) This chapter shall only apply to lease interests in |
14 | an unconventional reservoir. |
15 | (c) Definitions.--As used in this section, the following |
16 | words and phrases shall have the meanings given to them in this |
17 | subsection unless the context clearly indicates otherwise: |
18 | "Unconventional reservoir." A formation below the base of |
19 | the Elk Sandstone or its geologic equivalent stratigraphic |
20 | interval that contains or produces oil or gas that generally |
21 | cannot be economically produced at flow rates or in volumes |
22 | except by hydraulic fracturing, horizontal or multilateral well |
23 | bores or other techniques to expose the reservoir to the well |
24 | bore. |
25 | "Unit." A consolidation of interests of persons actively |
26 | engaged in the business of extracting oil or gas from land owned |
27 | or leased by the persons within a defined geographic area to |
28 | facilitate the drilling of wells from one or more unconventional |
29 | reservoirs. |
30 | Section 2. This act shall take effect in 60 days. |
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